The Slater & Gordon Limited (ASX: SGH) share price soared 30% to $0.145 today after the company announced that the Australian Securities and Investment Commission (ASIC) had concluded its investigation yesterday afternoon.
ASIC was investigating the company's accounts between 1 December 2014 and 29 September 2015 to determine whether they had been falsified or manipulated, and whether the Company or its officers had committed any offences. Yesterday evening the regulatory informed Slater & Gordon that it had concluded its investigation and found no evidence of wrongdoing.
Shares are up today as the investigation removes one of the axes dangling over Slater & Gordon's corporate head, but the company has a number of other issues including its weak cash flows and a possible debt to equity conversion, which could crush the value of existing shareholder's stakes. Slater & Gordon remains in a very perilous position in my opinion, and it is hostage to the interests of debt holders.
It is very difficult to imagine what today's buyers see in the business, and I am steering clear of the company entirely.
