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By Tom Winnifrith, The Sheriff of AIM | Sunday 8 February 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
You know that I am just a plain and simple nice guy. Well if you do, don’t tell anyone as I have a reputation to preserve. But as a nice guy I thought I’d drop a memo to the new team at Quenron (QPP), Jim “Hammer” Sutcliffe and Richard Rose about how to spin the looming disaster that is the PWC Report into Quindell’s fraudulent accounting policies.
Memo to the Hammer & Rose
The PWC report will be a disaster, We all know that. Your balance sheet will be wiped out as all the goodwill from Rob Terry’s disastrous deals and all that bogus accrued income plus some of the bogus trade receivables is wiped out. Your balance sheet will disappear, the loss for 2014 will be at least £400 million and there will be an inevitable conclusion that Quenron needs a massive cash injection to survive. So what to do.
First things first Gents – preserve your own, already tarnished, reputations. So blame it all on Rob Terry and former management. Thus.
1. Publicly fire Laurence Moorse and Rob Fielding. Make sure press photographers are there as they are escorted from the building. Stress that they are getting no compensation and are being fired for gross misconduct. Get that nice Mrs Harrison from HR to organise it - she seems like a bonny lass.
2. Announce that you have passed a series of files relating to fraudulent deals, notably RTA, Skillwise, the TMC transactions in 2011, Himex (the panama pumps) and all the others that you have stumbled across to the FCA and to the SFO and that you are pressing for them to prosecute all who have lied to and defrauded shareholders. Publically offer on camera to go to the SFO to assist them with their enquiries into past actions. Allow the press to film boxes of documents being loaded at Fareham and unloaded at 2-4 Cockspur Street.
3. Announce that Quindell will be taking legal action to reclaim bonuses paid to Rob Terry and others and dividends paid to Rob Terry and others which were paid out of the bogus profits reported in 2013.
4. Offer to do full press interviews – on video if possible with your biggest critics such as Dan McCrum, Daniel Yu of Gotham and myself in which you will apologise for the smears on our good selves instigated by the former management and its PR cronies and thank the critics publicly for bringing matters to a head. You will condemn those Quindell shareholders who have engaged in hate crime against the critics, publish a full statement of apology to the critics on your website and make a small personal donation to Charities of their choice by way of apology.
5. Acting on the PWC report you will seek to close down all of the bogus and cash burning businesses bought by Terry at once. Offer the staff a chance to buy those businesses for their written down balance sheet values ( ie £1) so that you are not accused of throwing them to the wolves.
6. Fire as many of your discredited advisers as you can starting with Cenkos. Meet with those suggesting a class action against Quindell and point out that Quenron is bust but agree with them – in public – that certain advisers to the former management were negligent in allowing them to lie and commit fraud. State in public that new Quenron will assist those seeking to pursue a class action against Rob Terry, KPMG, Cenkos and Canaccord with the provision of any information that they seek. Appoint a full time “Class Action officer” to assist your shareholders.
7. There must be one or two of the 191 businesses within Quenron that can generate cash on a stand-alone basis. Launch an immediate placing and open offer at whatever price you can get it away at – even if it is just 5p in order to clear enough of your liabilities to save that as a going concern. Feel free to rebase your options in line with the placing price. It may well be that the black hole is just too large, the liabilities and cashburn so great that no placing can be achieved. In which case place the business in administration and allow vultures to buy what businesses have value – to save jobs – as Quenron tries to clear what liabilities it can. I accept that shareholders will be wiped out but…
If you have followed my advice on points 1-6 then you guys will not get the blame. It will all be heaped on those responsible for creating this mess and rightly so.
Hammer & Rose, you are both relatively young so there will be another gig. Make sure you are not so tainted by association with Quindell that you become unemployable.
There is no need to thank me for offering you this advice, I do so just because I am a nice guy.
The Sheriff of AIM
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