other peoples money, page-9

Is your analogy that NCC used shareholders money to buy a big slice of fancy new rental agency who had CTN as their main tenant. Said rental agency was found to be a mob of amatuers and were going under fast. NAOS then paid rental agency 6 years rent to take the tenant and place them in their own house and rent to them while they figure out what to do with rental agency. NAOS could have just approached the tenants and offered them to move into one of their own houses. Then they jacked the rent to tenant via performance fee, turn the house into a nightclub and lock them into an unheard of 15 year lease. NAOS then claim this aligns interest to the tenant and them. Neglects to tell tenant that they owned a slice of rental agent and when tenants approach body corporate manager to ask why they are even dealing with NAOS in the first place discover who their new body corporate managers also happen to be. AmIClose? Or are you just asking why NAOS paid $12m to buy our CGA when they could have got the contract for free by dealing direct with the CTN board...of whom they now are?

I don't think stealing is the analogy. They are using their own money to fatten CGA balance sheet thus protecting the NCC NTA - which holds that dog CGA - until they can offload it to another sucker hopefully for that 40% loss you note. This supports NCC shareholders, who would clearly want this transaction to occur. NAOS may claim they are footing the bill for a bad investment, but in truth they are paying 5 years revenue to acquire a 15 year contract and adding a performance fee to boot, as well as being able to cut a deal with the brokers on the carve out of the CTN portfolio and doubling their FUM- adding multiple to NAOS value. It also appears they can pay the $12m progressively over many years. There isn't a fund manager in Australia who wouldn't take that deal, and it benefits their CGA dud investment, so they can't say this is a noble gesture of cost to them it is actually a good business decision.

What you would want to know is were any of NCCs CGA shares sold off to CTN? Clearly there was padding on the last day of October and I expect they are angry they ended up in the last placement so have been taken out or reimbursed vicariously. Selling CGA into the last flickers of a burnt out match of demand before it hits the low 30s would be your smoking gun, but I doubt they would do that for the simple reason we would see change in substantials in CGA and it would be too obvious.

All told the issues which are apparent or disturbing are the decision to not disclose anywhere to CTN shareholders that they held CGA in their own portfolios, that they were the largest shareholder of CGA, that CGA was looking like it was going to zero and that the 15 year contract is unprecedented.

The embarrassing truth which the CTN board will forever be remembered for is that if they were not balls deep stuck in the dead duck CGA was, there is no way on gods green earth they would have made a even a long-list of potential managers of CTN. I mean they wouldn't even have made the list of names you wrote down and then crossed out, on the reverse side of that long list. Now that isn't their fault, that is the fault of the previous CTN board, who then handed the keys over to NOAS to ensure it went well for them. I have no idea how the CTN board thought this was remotely in their shareholders interests, and if even Mark Kerr walked away from it, that speaks loudly enough

With respect to how good NAOS may or may not be as managers? Well if CGA was an informed investment decision their skills are clearly lacking because a 12 year old could have read the CGA accounts the day after they were listed and have seen they were underfunded, had no mandates, bleeding cash, too many staff, bottom performer and doomed to fail. And then they topped up even more in August. My only surprise was it took a year for CGA to collapse.

So what to do? Nothing. Battle over, they have the votes, that's how it works, welcome to George Street. Move on. I don't know if that is why you have a Sell on NCC, other than their utter balls up on CGA it might be a good portfolio.