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ERG 0.0¢

ERG = WORLDCOM a disaster in the making

  1. TheInformer

    99 Posts.

    The market has seen it all...the ERG world has revolved around questionable accounting treatments.

    The first phase of disclosure came in December 2001. Lets wait for the next round of disclosures. Most Boards can not seem to deal with the critical issues in a single sweep of the broom. In this case, ERG has been lacking in its disclosures and unrealistic accounting treatments. The auditors must be nervous and concerned about there underlying exposures.

    The ERG balance sheet still remains a mystery. Like the temple of doom....each step, is a step that may be on a land mine.

    The baseline business of ERG demonstrates a Loss. This is unquestionable. The question is will they survive with a "going concern" qualification and in an environment where risk management techniques will be applied by financiers in the management of exposure. To put this into context, ERG's bank facilities are in breach and therefore current as disclosed.

    Messages from the company may not necessarily reflect the nature of the underlying tension that exists between ERG and its financiers.

    Banks are not in the business of loosing money. Credit risk is measured and controlled.

    ERG is a company at risk. Managed by a Board that to date has failed to have an open disclosure platform with the market.

    If you can equate the Worldcom scenario with the ERG situation it is incredible that ERG has continued to be unquestioned by the ASIC.

    Accounting treatments that have failed the audit test.A company that is in crisis and a board that has failed to deal with the underlying issues of the company.

    Are we going to see a positive outcome for the company at June 2002? Will the company generate a second half profit as eluded too? Will it secure additional projects where it has a questionable financial position and where customers will question its ability to deliver.??? Question upon Question...Risk upon Risk...

    Sydney may be on the menu however this does not necessarily equate to a solution!!!

    Traders can have fun with this stock...many have...investors need to consider the risk reward equation. Trips to the casino needs to be controlled and with a budget in mind. Asset Control, stop loss management and basic common sense principles should apply.

    On balance this is not a difficult decision.

    The Titanic had alots of deck chairs however it is cold in the water.

    Remember "GOING CONCERN" Issues mean something.

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