Letter to the auditors of PGC, Heartland, PGW

So KPMG resigned. Wow, that is great news! Find the press release below and then continue to read.


Some time ago, one of our more experienced (in investment matters) readers told us about a strategy that sometimes yield interesting results.

If you have serious doubts about a company's financial statements then you write a letter to the auditors of a company highlighting the relevant issues. You can do this either as an open letter or as private correspondence, but if it is private then you make it clear you reserve the right to later publicise the letter. If you deal with auditors with half a brain cell then generally the end result is that the auditors put in double the effort to ensure they are comfortable signing off due to the implications of being forewarned.




I am not claiming credit for anything and as far as I know nobody that reads the board is doing that; I'm just telling you a story.
I believe the following speaks for itself and the following are interesting considerations.
1. KPMG's tagline is "cutting through complexity" and it is therefore natural to assume that PGC is just too complex. I agree and I support KPMG's decision; it was the smart thing to do.
2. I will not be surprised to see KPMG resign from Heartland and PGW too, so watch that space.
3. Bryan Mogridge should stop wasting his time and PGC resources with empty threats like "PGC takes the untimely resignation of KPMG very seriously, and has reserved its rights accordingly." Please note that PGC directors in general and Bryan Mogridge specifically should probably remember that shareholders have rights too and if I were them, I would be bracing myself for a shareholder lawsuit by now.
4. Bruce Irvine already headed for the exits, followed by Duncan and now KPMG. Mogridge resigned from Heartland and Torchlight and the question to him is why not make it the full monty? Do not assume because the boys from California, Baker Street Capital, are involved that this is Hotel California, you can leave anytime; it is not worth the risk. Clearly not.

5. We are making great progress. Slowly, but surely the house is being cleaned out.

Any credit goes to the minority shareholders and investors such as Reese Hart, Baobab, Wilton Capital, the Chaneys, Brian McCutcheon, Hurley Nominees, Alan Best, Graham Beirne, John Savill, Andrew David, Matthew Arnold, Antonia Hill, Akaroa Ltd, Philip Hall, Pam Williams, RS Slater, Cathy Black, Noel Fava, Jo Fernandes, Entrecorp, Gerard Scott, etc (see  http://www.ipetitions.com/petition/pgc/signatures) that were willing to stick their necks out in public to stand up for what is right. Tonight you can raise a glass, but tomorrow we are back in the trenches again.

By golly, this is fun!!

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Cheerio!
jA

Anderson Cooper once said, I think it's a good thing that there are bloggers out there watching very closely and holding people accountable. Everyone in the news should be able to hold up to that kind of scrutiny. I'm for as much transparency in the newsgathering process as possible.


PGC KPMG Announcement