Ann: Half Year Report and Accounts, page-22

@zhanginu ,

Thank you; that's good ferreting around for an angle on this Employee Expenses issue.

Only thing is, there are a few shortcomings in your thesis, notably in terms of the way those shareholder loans are accounted for.

Specifically, the escrow terms and lien conditions that apply to shareholder loans are at odds with your thinking about such loans not being able to be recovered.

Here's why:

1. The stock against which loan was issued is held in voluntary escrow with progressive release from escrow over a period of 6 years (and, as you say, the executive in question disengaged after just one year),

2. The loans are secured by a lien over the shares that were issued


So the scope for default on the loans is effectively zero and the only way the company could incur a loss of any sort in this regard would be if the share price was materially lower than the price at which the shares were issued (and in this instance that is highly unlikely to be the case given the share price is higher than it was when the share agreement was put in place).

And besides, even if a loss was incurred on the loan (and for reasons explained above, I don't believe one could have been), to book such a loss to the P&L is quite procedural, so that would certainly have provided no grounds for debate of such intensity that it would impact the tenure of Company Secretary or induce a change in auditor.


There certainly is something that warrants explaining, but I'm not sure that what you have kindly offered provides that explanation.