Big Un Ltd (ASX: BIG) has been one of the best performing shares on the ASX, growing by over 500% during the past year.
However, some people have been poking around the company which has now raised some questions about its arrangements and one of its shareholders. Today, Big Un announced it would enter into a trading halt because it wasn't able to respond to an ASX Aware Letter within the deadline.
A week ago, the company announced that the board confirmed the purchase of 3,030,303 BIG shares by FC Capital was negotiated in November 2016 at a price of $0.20, when the share price was $0.16. The company is confident this was this done at commercial levels and above board.
The company said that these are the only shares issued to FC Capital and no further shares will be purchased within the agreement.
Big Un said it has and continues to use Finstro's financing arrangement to help accelerate its market share growth. However, Big Un said that it isn't dependent on the arrangement for achieving future growth on a sustainable basis.
According to an AFR article, Big Review TV, a subsidiary of Big Un, granted security over its assets to FC Capital according to filings. A FC Capital subsidiary has listed collateral over Big Review TV's assets as 'all present and after acquired property – no exceptions', according to the Personal Property Securities Register. The AFR article says that the charge commenced on 21 April 2016 and won't end until April 2041.
Foolish takeaway
This is another interesting development in the Big Un saga and one that won't improve investors' confidence. It is an interesting question why this is only just coming to light, when the company could have outlined all of this in the past.
If I was interested in Big Un shares I wouldn't want to buy any until the fallout of all this is known.
