Burford Capital Share Discussion Threads

[dgdg1] 26/8/2019 09:23

So the bear case is that Woodford bought it, and that's now been newly exposed (?). And supposedly everyone bought it because Woodford did. (I don't think so). The "dodgy" corporate governance insofar as it existed (which is open to question) is not exactly a new discovery and has in any case been sorted out. As for the "probably" agressive accounting - I haven't yet seen any evidence of that, despite all the mudslinging. So I can't see which "game" is up. Rationally there's nothing new, but it's true that a lot of people are not rational and this is bound to affect the price for some time. How long that lasts for is of course hard to predict.

[topvest] 26/8/2019 08:37

For what it's worth, I think the game is up for Burford and it will now slip into mediocrity and lower valuations (probably at a discount to book value). Its been exposed for what it is - a 'hot' Woodford stock with dodgy corporate governance and probably some rather aggressive accounting. Getting back to £20 anytime soon is a daydream - its not going to happen. £5 is more likely and £5-10 range is the new normal pending further definitive news. There is probably more chance of breaking significantly below £5 if more bad news unfolds. All in my opinion, so DYOR.

[bbmsionlypostafter] 26/8/2019 01:54

tsmith2
25 Aug '19 - 19:57 - 12121 of 12127
0 6 0
Which sad sad person with apparently no position posts twisted drivel day and night even on a bank holiday weekend..

Is the answer Neill Rickets?

[gettingrichslow] 26/8/2019 00:02

I would say ‘you’re getting boring now’ but that’s been the case for two weeks now. So I’ll try this instead: ‘you’re getting even more boring than usual now!’

[williamcooper104] 25/8/2019 22:31

The background to the current accounting rules on provisions is perversely to make them harder to make in the accounts It used to be possible to make them with a lot of subjectivity - eg general provisions for loss These were then used by management teams to smooth earnings from year to year Thus you can only make provisions on actual events (even though there's still a level of subjectivity on determining significance of events)

[williamcooper104] 25/8/2019 22:27

Sk - many many listed businesses get served writes and LBAs every day You do not issue an RNS for something that wouldn't warrant a provision in your accounts and may not even warrant a disclosure note

[williamcooper104] 25/8/2019 22:23

Under IAS 37 you either 1 do nothing if it's a contingent liability but only a very remote chance of being crystallised 2 note it in the accounts - but do not provide for it - if it's contingent, unlikely to be crystallised but not remote If you are making a provision for it then it's not a contingent liability - it's an actual liability

[tsmith2] 25/8/2019 19:57

Which sad sad person with apparently no position posts twisted drivel day and night even on a bank holiday weekend..YOU

[dgdg1] 25/8/2019 19:36

This all has absolutely nothing to do with fair value accounting. It is only the financial investments which are fair valued, not anything and everything like legal cases (asuuming that was your implication. Those are the accountig rules. And how do you know the lawsuit has a strong chance of success? Are you a lawyer and do you know and understand all the parties' legal arguments? As for your other points I have already addressed them earlier

[sweet karolina2] 25/8/2019 19:27

Which all makes a complete mockery of fair value accounting.

You seem to be arguing that if BUR gets a lawsuit filed against it, which clearly has a strong chance of success, either in court or in a settlement as there is sound evidence (it is not a remote possibility at all) it is somehow acceptable for a newspaper to report it and because the share price did not go down much when it did that justifies BUR failing to report it by the proper means at the time.

WTG is subject to exactly the same rules and accounting standards as BUR. Making generic statements is fine for non material amounts, but when the amounts are material they should be specifically disclosed. BUR was not an innocent victim of a short attack and so far BUR has tried to do the bare minimum to correct the reasons why it made itself a target for the attack.

[dgdg1] 25/8/2019 17:44

SK, how WTG reports is not really relevant. As I said, if it is only a remote possibility there is no obligation to report it, and I think you understand this very well too. And as we saw, it didn't make a significant difference to the share price. As for your complaint that Burford should disclose that there is no certainty whether receivables will actually be received, as you and everyone knows it is always the case that payment may not actually be received, nothing unusual here. But actually the company has spelt out in its annual reports that regarding the non-IFRS accounting of ROIC and entitlements, a case is treated as concluded when there is no litigation risk, even if there is the risk of non-payment (or where payment is non-cash and there is no certainty about the final cash amount this will be sold for).

[sweet karolina2] 25/8/2019 16:28

MEANWHILE,

But you exclude vegan gravies from your hobby, whereas I like to expose all liars and frauds big and small. Obviously there is only so much I can do, but I do not exclude anything on arbitrary grounds.

Thanks to dgdg for confirming contingent liabilities should be disclosed. One which could wipe $100m (when you include interest and costs) from the bottom line is price sensitive and should be disclosed by RNS, not when some newspaper picks up on it. Even then BUR still has not produced an RNS so the whole market knows officially, rather than just those who read the newspaper which first exposed it.

WTG got an application for permission to bring a counter claim from the fraudster who used to run it. The claim is patently ridiculous and had not actually even been filed and hopefully Rob Terry will be behind bars before his counter claim is even heard, however here is WTG's RNS letting the market know:



Also in WTG accounts:

"Cash excludes escrow monies of GBP50.2m" this is money WTG is entitled to, however it is uncertain whether WTG will get it due to SGH case. Where are similar notes for where BUR books entitlements which are uncertain whether they will be received in part or in full?

WTG has provisions for £11m of which £8m is legal disputes:

Legal disputes and regulatory matters

In legal cases where the Group is (or would be) the defendant, defence costs are provided as the Group is committed to defending the actions. Such costs are provided for at the mid-range of possible eventualities given the uncertainty of the outcome, this range is reassessed on a continuous basis. If the Group is successful in defending such actions, then the final costs may be lower than the total provision recognised above. Additional provisions in the table above relate to an increase in the expected legal costs to defend these actions and do not represent providing against additional legal disputes. No amounts have been provided for the costs of any settlement, fine or award of damages, however a contingent liability of GBP637,000,000 has been disclosed.

Where are the equivalent provisions and disclosures in BUR's accounts?

[dgdg1] 25/8/2019 15:52

From hxxps://www.ifrs.org/issued-standards/list-of-standards/ias-37-provisions-contingent-liabilities-and-contingent-assets/ "A contingent liability is not recognised in the statement of financial position. However, unless the possibility of an outflow of economic resources is remote, a contingent liability is disclosed in the notes." So if it's considered remote then there is no need to disclose. As for being likely to cause a significant price movement they obviously thought this wasn't case, and they were actually proven to be right as on the day it emerged the price briefly went down and then quickly recovered.

[meanwhile] 25/8/2019 15:20

SK2 kindly tells us :-

"As I have said before my hobby is to expose liars and those who commit fraud. Lies of omission also count,....."

Well, as I have said before, my hobby is 'the creation, development and market acceptance of world meat gravies, red and white meats'.

So, there you are, you know both our hobbies now.

[sweet karolina2] 25/8/2019 15:19

WTG has provision for contingent liabilities against the SGH case filed and the class action yet to be filed. It has explained its view on both cases - ie that in its view both cases are without merit (they would say that and indeed it is part of the game to always deny the merit of any case.

That still does not answer the question of why BUR has not told the market by RNS of the 2 cases filed against it. Anyone who thinks a law suit claiming $91m would not be price sensitive or a class action of currently unknown quantum would not be price sensitive does not understand what price sensitive means.

[trident5] 25/8/2019 13:32

You jolly well have to provide for a contingent liability - if it's likely to crystallise and you can estimate the amount. And if those criteria are not met disclosure is required in a note.

[bbmsionlypostafter] 25/8/2019 13:29

But they're really keen on transparency. It's part of their ethos, innit.

[yidarmytom] 25/8/2019 13:25

Can't see how they are breaking Rules 10 & 11 which are quite subjective:-

"An AIM company must issue notification without delay of any new developments which
are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities"

It probably took the view that if made public, it wouldn't lead to a significant movement in the the price

My opinion based on some experience in this regard!

[williamcooper104] 25/8/2019 13:22

Sk - if they did their auditors would rip it out again You cannot provide for a contingent liability It's a note to the accounts

[sweet karolina2] 25/8/2019 12:59

So will BUR put a provision for a contingent liability in its accounts for the $91m? I can't seem to find the BUR RNS that advised the market that it was the subject of such a suit. Given another suit has been filed against BUR just recently, I do not recall seeing the RNS advising the market about that either.

Not more breaches of AIM rules 10 and 11 surely? Not good news for listing on a more senior market, if you can't even be trusted to follow the rules of the junior market you are already on!

[sweet karolina2] 25/8/2019 12:51

adnan,

Thanks for finally admitting BUR has completely ducked questions about Napo from everyone, shareholders and non shareholders alike. They will not be able to duck them in discovery and they will not be able to duck them when under caution from SFO.

As I have said before my hobby is to expose liars and those who commit fraud. Lies of omission also count, indeed it is very often what is being concealed that is worse than the things being openly lied about, indeed AIM rules 10 and 11 are very clear on the matter.

My investing strategy is to avoid all companies that deliberately mislead the market and / or commit fraud. Whilst there is an ethical dimension to that, the really important reason is that more often than not investing in companies that deliberately mislead the market and / or commit fraud will end up losing those who invest in them money.

All investors need to take their own view on the available information, doing their own research and analysis. Innocent until proven guilty is a great way to lose money, as by the time a company is proven guilty you will already have lost all your money a long time earlier. But only you can make your own investing decisions and only you are responsible for the outcomes of them.