Re: AFP search of AVZ's Perth offices
I am hopeful and quietly confident of a good outcome for AVZ and us shareholders. However, I have two concerns:
First, the AFP does not go around casually obtaining and executing search warrants in the absence of at least some prima-face evidence of wrong-doing by somebody. Evidence of some sort must have been presented to the AFP in order for them to obtain a search warrant, and then conduct the search.
The area where I feel AVZ may be exposed, innocently or otherwise, is Cong Ma's missing escrow money. Cong is sufficiently influential to bribe a DRC judicial or parliamentary official to make a formal complaint to the AFP.
Similarly, AVZ's previous in-country legal councel may have helped itself to some or all the money in the escrow account. After all, they set it up and apparently retained operating authority. They have a lot to gain by shifting the blame to AVZ.
Similarly, a group of Chinese shareholders with links to China and a lot of shares may have made a complaint in order to bring down management and subsequently the company. However, I have absolutely no supporting evidence.
Regardless of who is responsible for what, the mere whiff of cross-border wrong-doing is sufficient for the AFP to circle the wagons and start shooting.
Second, if AVZ board members are found to have a case to answer, or are found to have breached their directors' duties in some way, it may result in Locke withdrawing its line of credit. If this happens, it will probably signal the end of AVZ. Replacement commercial litigation funding would be unobtainable, and we can all say goodbye to our investments.
Having said that, I am glad AVZ has DLA Piper on its side.
Clearly, there are other areas of concern, including AVZ's association and subsequent disassociation with Marius Mihago, but the escrow account is where I feel AVZ has a weak point.
Just thinking out aloud, and quietly hopeful.
Cheers
F