By Stephanie Jacob
If you are an investor in a company drilling an exploration well and there is the possibility of finding reserves, why would you sell down your stake just days preceding an outcome announcement? Unless of course, you already have an idea of what the nature of the announcement is going to be – a whiff before others of the not-so-sweet smell at Hibiscus.
Tiger believes information and knowledge is power, the cat who knows where all the best watering holes are is also likely to be able to find the most options for lunch amongst the gathering herds.
This thirst for knowledge is something that Tiger believes she shares with those in the business world; knowing the nature of a company’s business, understanding its financials and being aware of the pitfalls all can help investors make the right call on where to put their money.
While some of this comes from ones own diligence and homework, other nuggets of knowledge are not as easily accessible as it is dependent on the company to release it to its shareholding public. In these occasions, there needs to be a fairness and equal opportunity given to all those who have an interest in knowing.
No special passes or first dibs here, there must be equal access so no one has an unfair advantage. Unfortunately, fair play is often overlooked in a world where a valuable piece of information can be worth a lot of money.
It was this that drew Tiger to Hibiscus Petroleum’s Middle Eastern adventures, and not its floral name of course, because even it’s sweet smelling name is struggling to mask the smell that something fishy seems to have gone on at Hibiscus during the last month of 2013.
For those who do not have elephant like memories allow Tiger to recap. In early December Hibiscus announced that they would begin drilling in Oman. The news was exciting because it was the litmus test for its much touted Rex Virtual Technology, which the management and promoters of the company had described as a game changer capable of better determining if a prospective well in fact had oil reserves.
As Hibiscus drilled in the Omani desert, their shareholders and investors waited with bated breath for a press release or Bursa announcement to see if all that they had been promised would materialise. In the early days of December the share price responded to the enthusiasm and a positive outcome was anticipated.
But things turned on Wednesday Dec 18, 2013, as Hibiscus shares and warrants started to tumble and its stock which had been mostly on the up and up for most of 2013 fell hard with the trend continuing on Thursday and Friday.
Then on Monday, the company asked that the counter be suspended, but still without any announcement.
Finally on Dec 24, 2013, the announcement that the wells were not commercially viable was made – by then Hibiscus had fallen from RM2.04 on Nov 25, 2013 when drilling begin to RM1.84 at the close on Friday, Dec 20, 2013.
Tiger understands getting rid of the stock after disappointing news, and again when Hibiscus said that it was suspending drilling due to safety issues. But according to Hibiscus’ statement to Bursa, the entire drilling process was apparently only completed on Saturday Dec 21, 2013 – so why in the world would investors shed their holdings before that, when there is all the possibility that there may be barrels of black gold under the Omani sand?
The obvious answer is that you would not, unless you had a solid reason based on very valuable information that allowed you to get out of the game in a winning position before everyone else knew that the tide had turned.
And if Tiger’s gut instinct is right, then it would appear that there were a handful people who got their hands on key information before the rest of Hibiscus’ investing public, and if the latter are anything like Tiger than they will be calling for blood.
In the jungle where Tiger runs the show the laws of nature are enforced to the hilt; in the corporate jungle this job falls to the Securities Commission (SC) who must show that it is not as toothless as many believe it to be.
A thorough investigation must be done in the interest of protecting the average investor, and if there indeed has been a breach of ethics, then the SC should clamp down hard.
After all it was the SC that allowed the introduction of the special purpose acquisition company (Spac) as a financial tool in the first place, and it must now make sure that it is not abused by a few wily promoters.
GRRRRR!
You must be logged in to post a comment.