Shareholders have just been scammed by the best of them. The...

Shareholders have just been scammed by the best of them.
The stories on the AFR is to create a side distraction. It makes out that Murdoch has lost out but no one will ever know if a side deal is done to pacify the Murdochs. Clearly with all the dodgy dealings throughout the year, they decided to amend the plan and instead they went with plan B as Murdoch and Gordon were too involved for Plan A to go ahead without a lot of shareholder challenges. By making out they lost too, it becomes more palatable to other investors that their equity was fleeced for NIL consideration.

Plan B. Get Bruce Gordons brother who owns CBS to get Ten at a firesale price before anyone can pick the pieces and launch a class action. And carve up the bounty once delisted without the hassles of ASIC.

Foxtel and CBS have been net beneficiaries of Tens existance for the last 10 years. Ten has been bled dry by the directors and major shareholders throughout the years with promises things will get better. Now they finally are getting better and the financials are being presented in a bad light to ensure the shares are valueless.

There are numerous issues in regards to misleading statements and shareholders being made to reduce Ten to a pile of rubble.

My main bugbears are as follows:

1. Guarantor loans. These were facilitated as Ten was probably bankrupt 4 years ago when they were arranged. These loans enabled Ten to trade for 3 more years and bleed shareholders for approx. $1 billion in value. The shareholder guarantees earnt $30+ million over 3 years. It appears it cost the company 6% per annum in addition to bank finance. In some years the balance would have averaged only $100K but it was still costing about $12 million in fees. That equates to about 12% per annum for the privilege. In the 2013 presentation the financial modelling indicated a likely total fee over 4 years of $19.6 million (or about $5m per annum) to the guarantors. But somehow this ended up at $12 million per annum or $30+ million after 3 years. Given that Murdoch remained a director until 2014 and this was implemented prior I believe it may have breached Section 588FDA was likely breached as an uncommercial transaction. I note the administrator is a bit grey here by simply advising he has not been supplied with sufficient information to identify breaches but is very convenient to gloss over the lack of information and make the assumption there is nothing to see here. As per the report.

• Uncommercial Transaction
• An uncommercialtransactionis one that it may be expected that a reasonable personin the company's cri cumstances would not have entered into,having regard to:
• the benefit or detriment to the company;
• the respective benefits to other parties;and, any other relevant matter.
• To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation. However, if a related entity is a party to the transaction, the period is four years and if the intention of the
• transaction is to defeat creditors, the period is ten
• The company must have been insolvent at the time of the transaction, or become insolvent because of the transaction.

1. There was Non-disclosure of existing guarantor not willing to extend period of his guarantee. This was rather material and known for some time but was never disclosed and was still not disclosed on 26/5/17 when ASIC raised a price query. Company secretary responded that there was no material undisclosed information affecting trading. Clearly this was not the case and next announcement was a few weeks when trading halt occurred. Doubts were raised in January 2017 and confirmation supplied on 2 May confirmed it would not be renewed by CPH. Does this not breach Listing Rule 3.1? It totally sucks to know this as my re-entry into ten after disappearing for 3 years was on 2 May. Had I been aware of this issue I would most likely would not have purchased.
2. How does a television licence valued at $785 million in March 2014 reduce by over $650 million down to $132 million when revenue drop off during this period is non-existant and the underlying cost of the licence decreases significantly. During the final 3 years there has been more than $700 million in equity value destroyed and additional $150 million equity raising cash burnt. Not bad, $850M in 3 years, get paid for offering the guarantee and near maturity take ownership at cheap price.
3. Administrators working on the case well in advance so matters could be progressed immediately once process of placing in VA was finalised.
4. The final nail in the coffin which sent Ten into VA was the inability for directors to run the business due to a direct legal threat from majority holders not to use the facilities available to run the business. They knew full well that during this time of the year Ten historically has lots of outflows during this period which are recovered during the course of the year. They have projections most likely 12 months in advance so why the sudden issue about using the facility. By making a legal threat to directors, the directors were compromised on running the business and could not continue their roles. What right did these shareholders have to early terminate a facility which was agreed to be available up to 4 years with which they were paid generously for placing a signature. I cannot recall any disclosure about guarantors ability to retract the facility early in order to destroy shareholder value. And why withdraw guarantee support, send Ten to VA and then offer it a lifeline during VA. If they just let Ten use the facility and not threaten to sue directors then it would still be BAU and Ten shareprice would be well up on 16c due to lower licence fees. If I was aware of this ability to close the curtains with a threatening letter, I would most likely would not have purchased.

Why is it that when Ten was in genuine serious trouble these guarantors were happy to offer a guarantee at considerable cost to the business. Then when cash flow is improving they do everything they can to send it to VA? Why did they not take a small equity raise like had been done so numerous times over the previous years, i am sure shareholders would have supported this. Why did they act against shareholder interests? Maybe it should have been disclosed that guarantors reserve the right to destroy the company at a future time of their choosing.
If you look further into the past it becomes more obvious that Ten never had a chance of survival from many many years back and major shareholders have been pulling strings to fleece genuine investors who were gullible to believe the presentations being put forward telling us how rosie things were looking.

It is hard to believe this can be done on an open market with regulation but alas it has happened and everyone knows there is lots of dodgy issues in regards to how things are run at ten but no one is speaking up.

I rely on ASIC to protect investors on listed stocks, especially given it used to be quite a large corporation but dont hold my breath expecting too much here.