"My view is the due diligence was carried out in depth and...

"My view is the due diligence was carried out in depth and professionally."

As with many of your views on SGH posted here since 2015, you've come to that conclusion without any real supporting evidence.

The DD may or may not have been in depth and professional, but most likely no-one on this forum was involved closely enough (and have the background) to make that judgement.

We also don't know how the DD was "compartmentalized" - in other words the manner in which the DD was divided up into separately scoped tasks and allocated internally or to different external advisers, and whether the job of bringing all the individual DD reviews together to provide a final recommendation or valuation was done internally by SGH or by one of the external advisers with overall control.

And we also don't know what the the various DD advisers' conclusions, caveats and recommendations actually were.


For all we know they may have said "don't touch this with a barge pole - but here are the good points, use your own judgement and here's our fee."

We also don't know whether the final recommendation or valuation supported a $1.3B purchase price.

We do know from the pre-purchase memorandum to shareholders that SGH (correctly) valued Quindells WIP at a much lower figure than was in the Quindell accounts, but we can also see from the same memorandum that they then apparently ignored the WIP issue when doing their forward revenue projections. Would be nice to know who was involved in that slip up in the model.

It should be remembered that if the purchase price for Quindell had been something closer to what some analysts were valuing it at the time - like maybe $200M - and if it was mainly from an equity raising, and if AG had the management skills to fix the negative cash flow early on - then it's likely SGH would be alive and kicking now - though maybe with a share price under $2 as some damage would still have been done.