Bryan Mogridge on selling PGW- "Selling..would be foolish"

On 7 March the board announced the sale of 19.1m shares in PGW.

This action raises a significant question mark over the credibility of the board in general and specifically its chairman Bryan Mogridge. Here is why.

On 1 November 2011 the PGC board’s chairman, Bryan Mogridge said the following, at PGC’s AGM.

 

In the presentation he communicated the following,

To reinforce the above, on 29 February 2012 PGC released the most recent financial statements and in Note 17 management revealed it reclassified PGW shares from “Assets held for sale” to an Investment with the obvious conclusion that it is now held for investment purposes and not as an “Asset held for sale”. In the company’s words (see note 7)

One week later, on 7 March 2012, the board announces it sold 19.1m shares. Four months ago Bryan Mogridge deemed it “foolish” to sell PGW shares and one week ago the board communicated to its auditors and shareholders that PGW is no longer marketed as an investment for sale and is not considered an “Assets held for sale” any longer.

The questions it raises are,

1. How much does it impact the credibility of the board in general and its chairman specifically?
2. How much weight can a shareholder put on the words of its chairman in general?
3. How much weight can a shareholder put on the words of its chairman, when spoken at a company’s AGM in particular?
4. What does it say about your company’s auditors, KPMG in this case, if a company it audits can release results where it says assets are not held for sale anymore and then the next it starts to sell those assets?
5. Where are the gatekeepers and referees of the investment world when it seems impossible for shareholders to take its board at its word? Is the New Zealand Stock Exchange supposed to say anything or is its business only to grant waivers whenever management or the board of a company requests one? Is the FMA supposed to say something since its objective is “promote and facilitate the development of fair, efficient and transparent financial markets”?
6. If none of the above applies then what exactly stops the management and board of a company to say exactly what it wants and do exactly what it wants without any regard whether what it says and does matches up from one quarter to the next, as in this case, or even one week to the next?

Cheerio!
jA