Saturday 8 August 2015

Cliq: messy annual report

Cliq announced on August 3rd its annual report, on August 5th its amended annual report and on August 7th another amendment on the same report. The last amendment consists of seventeen pages, quite shocking.

I do understand that Cliq's Board of Directors is getting all excited about its possible acquisition, but it really should put more care in writing its annual report.

Kinibiz wrote a good article, clarifying the different motives for management and shareholders of a Spac:

"Misaligned management and shareholder goals: Spacs".

Some snippets:


For the management teams of Spacs, it is about getting a qualifying asset or acquisition at all costs, so the company can graduate to become a full-fledged company like any other on the bourse. Shareholders, on the other hand, want to get a nice return on their investments and this might come even if the Spac does not graduate.

Cliq has identified and signed a sales and purchase agreement to acquire a 51% stake in two producing Kazakhstan oil blocks for US$117 million (RM429.53 million as at the announcement date) from a local Kazakh company, Phystech Firm LLP. It is currently in the process of gaining regulatory approvals before being able to take it to its shareholders. Sona, meanwhile, has said that its management team is in advanced discussions over several assets and is confident they will meet their deadline.They had better be confident, because the alternative is losing their entire investment.

It comes down to this: the management team’s primary focus is to secure a deal so long as it allows them to graduate, while shareholders will be torn between the promise of eventual gains post-QA (possibly quite far in the future) versus a tidy risk-free gain at the end of three years.

Management and shareholders, two different agendas – only in the curious world of Spacs.

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