Today RNS released announcing an FCA investigation into Quindell trading announcements and the suspension of trading in the companies shares.
So what does it all mean?
1. New BOD onboard. They would not tarnish their reputations by joining if they believed QPP had skeletons in the cupboard.
2. £50m in escrow account. This indicates BOD have £50m ring fenced if required to deal with past issues.
3. FCA sanctioned the sale of the SGH deal. In other words they believed all above aboard. They are hardly now going to investigate and say they made a mistake.
4. QPP suspended the shares. What would have happened when news got out about FCA investigation? Credit to QPP they made the announcement before wider market knew what was going on.
5. We will be getting a trading update before the end of June.
6. PWC have already stated accounting practices are on the aggressive side of acceptable practice. This is another way of saying they have found nothing criminal.
7. The share price is ring fenced at £1+ due to the capital return.
8. FCA are ineffective. Do we really think they would be able to find anything, if anything to find, when the business has been forensically scrutinised by its detractors for so long?
2. Shares suspended. Have they been suspended so everybody has the same information at the same time when trading update given end of June, thereby providing a level playing field?
The FCA investigation will focus on announcements made by the BOD (no longer with us). They will be covered by professional indemnity insurance, if they have made a mistake and if they have committed fraud they pay the consequences.
What have we got to be concerned about?
We have loads of cash in the bank and a business that is valued at 0p. The worst case scenario is we end up with loads of cash in the bank and a business that is valued at 0p.
Sentiment and our own worries are all private investors have to worry about. These will change as the days go by and in the worst case scenario, IMHO we will end up where we started before the shares suspended.