nsw will liaise asx soon against the restructu, page-2

An email I have just sent to ERG... Wonder if I'll get a reply?

To Whom It May Concern,

I am a long-suffering shareholder in the company (1.5 million shares) who has stood by patiently and listened to, and read the many substantiations and explanations over the years as to why the company’s performance has been so disappointingly bad. I have scanned the current documents released on Friday (Independent Experts report and Annual report), and I cannot find a single thing that convinces me to vote for the proposals. I may be incorrect in my assumption, but it would appear we, as shareholders, are again being handed a fait-accomplit, and virtually being ‘advised’ that if we do not hand the entire company and its assets to Duncan Saville, we will have nothing but an insolvent company. Pardon me for being obtuse, but if we hand everything to Saville, and he controls the new entity with preferential shares, and then only (possibly) provides a return to the current ERG shareholders after he has satisfied his own requirements, are we not, as shareholders, giving everything away anyway?

The current figures indicate a cash-in-hand balance of approximately 19 million dollars, and if I am to believe the constant reassurances of Mr. Colin Henson, there is more to come as projects come on line. Having stayed the distance for so long, am I now going to lose everything, with the possible exception of a positive outcome in the ITSL PTTC court case? And if there is ever a positive outcome with that litigation, who will get the proceeds, what percentage will be distributed, how will they be apportioned, and when? There are many other questions I, and many other shareholders I have spoken with, would like answered, and I feel that to wait until the AGM will leave insufficient time for discussion (or is that the whole purpose of the proposal)?

Furthermore, I am aghast that Mr. James Carroll, according to media reports, has been granted a bonus of $233,500! This, at a time when the company is financially insolvent! I realize there may have been contractual obligations in relation to benchmarks being achieved, but in order to achieve these, presumably some positive progress must have been made somewhere?

In short, I feel these proposals are outrageously one-sided, with absolutely no regard for the shareholders at large, other than a few crumbs which may amount to nothing.

Have any other proposals been forthcoming? Has any representative from either State or Federal governments been approached? I mention this only to highlight that many other industries receive support (auto manufacturing, textile etc), and I feel certain the probable loss of jobs may heighten interest in any proposal put by ERG to government.

Has the NSW government been approached to ascertain the possibility of recommencing work on the contract, and cancelling the current litigation?

There has been no word on the success of the Beijing project, which I find astounding, given the positive exposure it would have generated. A comment was made by one of your staff that “we don’t make public every bit of good news”. Pardon me for sounding sarcastic, but I would have thought ANY item of good news would have been desperately sought, given the circumstances.

Although I stand to lose over $300,000 from my investment in the company, as the current proposals apparently give me little or no chance of ever receiving a return (as noted in the Independent Experts report), I believe the directors of the company must bear the entire blame for this ongoing fiasco. I would rather, given the cavalier approach of this proposal, see the whole company, along with my investment, disappear.

I would appreciate a reply that may allow me to consider the proposals in a more informed manner – as it stands, I, along with many other shareholders, will be voting no on all proposals.

I await your reply.

Peter Bills