Ann: Responses to ASX Queries, page-20

Hi  New to this discussion.  I was originally an owner of Gem Exploration (1988) which after various transformations became Merlin.  I was always concerned about anything to do with Joe Gutnick; and enquiries into Mordecai have pretty well indicated that he is Joe's henchman.  I think in the last year Joe and Mordecai had some chance to redeem themselves.  However I tend to agree that the responses to ASIC by Merlin are so bad that the situation is unresolvable. 

I am unsure of the powers that ASIC has, whether there is grounds for legal action.  However to me there are two options:  1.  the Company is entirely delisted.  2.  AIC (somehow) force all the Directors to be replaced.  I do not think Merlin can continue as is. 

With respect to 1, I would expect Merlin would soon go to voluntary insolvency. 

In the event of 2 I doubt that any new set of Directors would be able to deal with  the issues.  This means that I expect Merlin will go into receivership either way.  But in the second option there is more likelihood of  legal action against (all) the Directors.

This means that option 1 is probably the preferred path for the Directors as they may be able to avoid legal action.

A receiver  may actually be able to recover debts etc. and may well also be  able to sell the assets - and this is a better scenario than keep pumping money to Merlin for 'odd' loans to related Companies.  Truly sorry that my comments are pessimistic.  I have to front up to my wife at some stage and tell her our investment in Merlin was a dud.