Burford Capital Share Discussion Threads

[sweet karolina2] 24/8/2019 11:31

winsome,

I think you have hit the nail on the head. Nobody cares whilst they are making money, they only care when it starts costing them money.

Personally I don't invest in liars and frauds, mostly because of the risk that doing so will lose me money, but also I want to see a more level playing field for all companies. It is getting so that the only way an AIM company can raise money at a decent price is by lying to the market. Ultimately that is unsustainable and overall costs PIs far more than all the short attacks combined.

I fully support the campaign to clean up the AIM cesspit. The AIM casino should be about gambling on unproven / junior company prospects, not on whether lies and fraud are going to be exposed and become millstones or company killers. In turn decent honest companies should be able to raise the capital they need to grow without having to over promote themselves to be noticed in a market of liars and fraudsters.

I also want to see PIs taking more responsibility for their own investing decisions and the behaviour of the companies in which they are invested - ask the difficult questions, go along to AGMs and confront the BoD, better you do it than a short attacker does it. But above all I want PIs to stop passively volunteering to be victims of scams.

[williamcooper104] 24/8/2019 01:30

I'm in same boat - for me it's because while it is now immaterial - it was not so long ago my largest holding (by a long way before sold half c18 months ago) So it's hard not to still be fascinated I may add in future - I may not Still have a holding in Mano and Lit - so my overall litigation finance is not so immaterial (but still not huge) Personally with selling Bur and ETO (my second largest holding when held Bur) I'm now v cashed up generally and unsure of what to buy

[rar100] 24/8/2019 01:17

SK

Thanks for your reply and take on things, I tend to agree, they were in a regard outside of the game of law and big money - bit players kind of playing the good guys, and now up to their necks in sueing MW, being sued, doing investigations into trading irregularities, being investigated.
Like a fisherman/woman falling into a river of Piranha, poetic justice?
I can't see them as pure innocents with the obscene amounts of money involved and their pay rates, i can see them making mistakes (even if bankers and lawyers they are still homo sapiens and mistakes is what we do most and best at).
The question of deliberate fraud must be answered and they should let almost anybody see their accounts since their inception, a trial with a legal outcome,
The IC said in their headline the jury's out. If they are innocent of charges laid against them isn't that the only way to prove no wrong doing....

[qruz] 23/8/2019 23:34

If you only have 1% of BUR in your portfolio, why would you bother arguing back and forth constantly on a BB forum?

[williamcooper104] 23/8/2019 22:36

They don't have to do a reconciliation to cash accounting Just simply tot up all cash receipts net of costs (setting out what's part return and what's concluded) and compare that to cash receipts net of costs As soon as you do that you would want to know what the estimate of future recovery was on partially concluded and open cases And if you do that you're back to Fair Value accounting

[henchard] 23/8/2019 21:51

winsome,

I think Muddy Waters should be judged on its own track record of outcomes, rather than on the general success, or otherwise, of "these short attacks." I know nothing about Viceroy, other than reports the chap behind it is a former social worker.

I'm not saying Muddy Waters gets it right 100% of the time or that it's necessarily right on BUR (albeit right to the extent of having made quite a lot of money on it so far).

I can see where adnan and the other feller (whose username slips my mind) are coming from on the Napo/Glenmark matter; namely, that the deal between BUR and NAPO might mean BUR was entitled to a substantial fee for Napo achieving not very much at all from the arbitration and also having to pay Glenmark's costs. Desperate companies can agree to daft things. But BUR also seems to have screwed up in this instance if it thought its fee was readily recoverable from Napo on the outcome that occurred.

Companies like Napo agreeing to daft things or not, the quantum - $15.8m - that BUR booked does seem extraordinary in the circumstances. I don't think the market will be satisfied until BUR has explained it.

Sure, $15.8m is an historic matter and a relatively small amount compared with the value (market cap) that has been wiped off BUR. The point, as SK has said, is that if the $15.8m is made-up or unjustifiable, it amounts to accounting fraud, and that's compounded by a further fraud on bond investors with money raised on a false prospectus of profitability in 2013. If so, that would open a whole can of worms of law suits, and questions of what else BUR may have done between 2013 and today.

I think it would be best all round if BUR simply explained the Napo/Glenmark/$15.8m question, assuming it's able to.

[sweet karolina2] 23/8/2019 21:43

winsome,

You are entitled to your opinion and to express it, just as I am to mine and to do the same. You have made your investing decision based on your own analysis which is fine. I think you underestimate the impact that BUR IMHO committing fraud in 2014 can still have in 2019, especially with a short attack on going, law suits being filed and FCA and FRC investigating, but you know all that and have taken the risk into account in your risk reward balance so again that is fine.

[winsome] 23/8/2019 21:23

sk, I also disagree with your opinion that LIT financers are not a force for good. They only support cases where there is a clear wrong to be righted. BUR have discussed inventors being ripped off, LCM have cases in action such as a large company breaching a designer's copyright. These people would have little chance without someone backing them. To say 'they should all sit down and talk it over' is really naive. Big companies don't listen. I had the same problem in my class action lawsuit which we ultimately settled after a 3 yr fight with a large obstinate company. We had looked at a form of funding and narrowly avoided having to use it as we settled out of court. The company settled out of court because we told them we were securing funding to see the case to the end. We'd have been happy to give a funder a cut rather than quit with nothing because half the claimants didn't want to commit their own money to huge court fees. So it would be a bloody shame to see Lit funding brought to a halt. That would be protecting the big companies' profits and the fraudulent and negligent ones.

[winsome] 23/8/2019 20:55

sk, you are so obsessed with Bur and Napo it must keep you awake at night. If you say you have no financial interest in this then maybe you need therapy, or to get a life.

IMHO I don't think the NAPO thing will go anywhere. More important thing is to clarify their accounting as MW has asked. Especially as lawyers are lining up to bring action on the basis the MW accounting claims are true. I see the logic in MW thinking of how BUR evolved in the early years (from first part of his follow up) but he doesn't claim they've done anything wrong in that regard. But I don't follow his weird logic re the accounting claims. So I don't follow BUR blindly. I'm wary until things evolve from here. BUR makes up only 1% of my portfolio, way down from before I sold out most, but I won't buy back in until there is more clarity. I expect they know they need to bring an alternative auditor of some sort in to do a review and publish their findings to keep the market happy. That would take time.

Interesting to read the very much more convincing short attack by Viceroy on Capitec, which I believe MW mimicked. Viceroy's accounting claims were ultimately discredited by the SA Reserve Banks and SA regulator. So these short attacks cannot be given any more credibility than their targets.

[rar100] 23/8/2019 20:17

SK,

I wonder if you would have the time or inclanation to list the main things Burford has to do now and in the future to make it's accounts and it's general business model as transparent as possible so to ensure it's good reputation in the future.

They have addressed some issues as you know, (hopefully listing on Nasdaq or FTSE, the CEO/FCO marriage thing, possible share buyback).

With not knowing what outcomes will be in any 'investment' as they put it, maybe just give a high and low estimate of profit?

I would like to know your views if you so deem it worthwhile and will understand if that's not your bag.

I really don't know what to think of Burford now.

[1corrado] 23/8/2019 19:51

Dow nearly 600 points down.

[sweet karolina2] 23/8/2019 19:41

adnan,

You have ducked answering my question - very simple: what response did you get from BUR / others you contacted re Napo case?

Always do your own research and analysis when making investing decisions is my answer to your other questions.

Remember I got an auditor fined and severely reprimanded having done my research and analysis.

[trident5] 23/8/2019 18:29

Another thing to remember about Burford and auditors - auditors audit the financial statements - these are the P&L, balance sheet, Cash flow statement and supporting notes.

They do not audit the directors' report, merely check that its content does not contradict anything in the accounts and they do not audit presentations.

A lot of the financial and case information presented by Burford sits outside the audited documents.

[williamcooper104] 23/8/2019 18:22

On 1 - A big 4 audit sign off (speaking as someone who started their career in that field) really is no guarantee of no fraud - auditors are not fraud detectors

[adnan17] 23/8/2019 18:18

Hi SK, you know I value your critical, deep, thorough and independent thinking. Hence was hoping to ask you a question?

With your strong critical, independent, logical mind, which you use to tackle complex problems, which of the two do you think is more believable? Or are they equally believable or equally not believable? Be great to get your opinion:

1. Burford committed accounting fraud on Napo despite being independently audited by E&Y and having now submitted full details of its business and accounts to the SEC in order to get a US listing?

2. TW being fired by Jim Mellon for something suspicious?

I'm a small time independent investor and have no details or way of knowing which of the above two points are correct or incorrect and don't have a view. Was just wondering what you thought, especially as you have a Masters degree which allows you to think critically and logically.

Thank you.

[adnan17] 23/8/2019 18:00

Do you think the above analysis of how TW was nearly made bankrupt paints him in a positive light? I don't know him. But just wanted to get your opinion if an independent long term investor like me should trust his analysis after the details you have put forward?