question about pitcher partners august update, page-24

Hainholz, yes you are right. Directors have to provide proper guidance on earnings outlooks and so on. The difficulty for you guys in suing (which I reckon is a good idea, by the way) is in proving that MK made a false statement.

To do this you will need to find evidence that MON and MK knew in April that they were not going to become cash positive.

Alternatively, you have to find when they were not cash positive and knew this was the case - if they delayed in informing the market of this absolutely price sensitive news, then this is also an illegal act - ie; trading and carrying on a business which is insolvent. For example, did they find out in May and not release the information tille a week, two weeks, X weeks later?

Another avenue to pursue is disclosure. Were all loans and financial arrangements properly disclosed? The TTY loan was a related party deal. Regardless of ability to pay, TTY and IRl were charging MON interest and it can be argued that, as a shareholder in all entities, MK set himself up to benefit from these intra-party loans between his various shells in the shell game. The disclosures surrounding these 'business' decisions on the part of all three boards ought to be looked at. The same goes for his magnanimous personal loan to MON he proffered - odd that MON should pay interest to its larger shareholder. Ridiculous.

Aside from other issues, a failure to at least legally investigate this corporate collapse will basically show up the ASX and Australian fiduciary regulatory systems as being made of tissue paper.

It isn't good enough that powerpoint presentations can mention "500,000 Oz per annum" and lead to bankruptcy, and no one is held responsible at all. Its almost like no one is at fault, that the rocks conspired to deprive MON of money. The thing is, its not like a pit wall collapse or a Beaconsfield Gold event - the gold wasn't there to begin with and MON/MK ought to have known this was the case and should have done their jobs properly and come to the conclusion mining could not be don profitably, and not done it. The fact they did screams of flagrant disregard for JORC, engineering principles, professional ethics on behalf of employees, the whole stinking kettle of fish. And that means someone, somewhere, is at fault of at least civil misdemeanour if not criminal misconduct and negligence.

In my inexpert opinion.