I own notes........Letter to ASIC ........concentrating on...

I own notes........

Letter to ASIC ........concentrating on keeping it very simple with the regulator, at this stage. Keen to find out what the Trustee is up to and views of other top 5 noteholders.

I think a weakness in BNB argument (note mentioned previously)....is the fact that sure bank subordination to noteholders was mentioned.....but not to the extent of common law fair and reasonable standards, such that the banks can now obtain 20% interest.

I would hope for guidance from Trustee soon. Please continue to correspond with ASIC/TRUSTEE and even the company as I have done.


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The Manger Misconduct & Breach ASIC
GPO Box 9827 SYDNEY QLD 4001
B/Copies

ASX Markets Supervisionustralian Securities
PO Box H224 AUSTRALIA SQUARE NSW 1215

Chairman BABCOCK & BROWN Level 23
The Chifley Square 2 Chifley Square SYDNEY NSW 2000

Dear Sir/Madam

BABCOCK & BROWN – BREACH/CONDUCT

I would seek to present to you, information with regard to the public company, Babcock and Brown, which in my view is in breach of listing rules Furthermore in my view, it the intention of this company to proceed almost immediately to a significant company reorganization, which according to the company would see the value of shareholder and bondholder equity lost. Indeed such a result may take place without compliance with the obligations and rules of an Australian publicly listed company. Accordingly it is requested that the ASIC consider this matter in an urgent fashion.

Page 2 SHAREHOLDER APPROVAL The company is proposing implementation of restructure of ALL of its debt facilities. An amount of A$2.8 billion and US$200 million corporate facilities (see ASX release of 6 th February 2009). The proposal is such that all of the debt of the public company Babcock and Brown will be restructured, without the approval whatsoever of ordinary shareholders. ASX rules Chapter 7 discuss the various situations which require shareholder approval. This is a situation where in fact, ALL of the debt of Babcock and Brown will be modified without the company obtaining shareholder approval. It is clear that such a proposal by the company would require shareholder approval. It is asked that ASIC intervene and order a review by the company for a shareholder vote on such a critical matter for equity holders.

INDEPENDENT EXPERTS REPORT- NOTEHOLDERS

The company has proposed a 10 cent payment for its listed $100 face value subordinated notes. The proposal will be voted upon in a special meeting next month. Indeed should the 10 cent offer not be accepted by the noteholders, the company has stated that it will become insolvent. No independent experts report has been provided by the company, to allow noteholders to made a decision. ASIC regulatory guide RG111 gives guidance on the requirements for expects reports. The company in recent ASX disclosures intimate recent writedowns of some 50% of asset values. However it is not clear, and should not be up to noteholders to second guess the situation. Audited financial figures, in fact no figures, have been released since the June 2008 half (when the company was strongly asset nett positive.) Once again, it is suggested that the regulator intervene to drive enforcement of fairness and company rules/obligations. Yours faithfully