Dana Gas: A Closer Look at Pearl Petroleum Limited

This post takes a closer look at DG’s لؤلؤ of an investment, Pearl Petroleum Ltd. BVI which accounts for the lion’s share of DG’s bewhiskered Trade Receivables.  

What can we learn about how Pearl is doing from DG? In performing this exercise we’ll ignore for the moment that cash payment by the KRG has severely lagged billing.   If DG’s information is lacking (a question that might not really need to be asked), do we have alternative sources of information? How do we exploit that information?  

Why take a closer look? 

According to press reports, DG’s management has admitted that its Egyptian operation has generated only USD 60 million in net profit during the ten-year life of the sukuk and just this month advised that Zora field production was down some 49% from the “corresponding quarter” in its 1H2017 interim financial report.  With a track record like that, taking a look at DG’s “jewel” is well worth the effort.

Dana Gas Information on PPL

As I posted earlier, DG’s disclosure regarding Pearl Petroleum Limited is rather limited.  For some reason no doubt well-reasoned and Shari’ah compliant, DG does not disclose its share of net income in PPL but only gross operating income. 

As regards Shari’ah, AA supposes that there has been evolving interpretation of what “selling” or “wet corn” means (Muslim/Abu Hurairah) or “selling without disclosing defects” (Ibn Majah/ Wasila bin el-Asqa). 

AA has trawled through DG’s audited financials note on joint operations and prepared the following summaries. 

Let’s start with the statement of condition aka “balance sheet”. 

DG Info: PPL Balance Sheet USD Millions
Year	CA	NCA	TA	LIABS	EQUITY
2016	2,117	726	2,843	194	2,649
2015	2,123	777	2,900	89	2,811
2014	1,950	790	2,740	100	2,640
2013	1,358	823	2,180	45	2,135
2012	1,088	848	1,935	25	1,910
2011	670	878	1,548	28	1,520
2010	343	908	1,250	58	1,193

Technical notes:  

• The joint operations note presents only DG's share of PPL's assets and income.   
• To get PPL level information, one must divide DG's share by 0.35 in 2016 and 2015 and by 0.40 for the earlier years shown.  Why the change in 2015?  DG sold an additional 5% to RWE in 2015.  
  

Comments:

• DG “consolidates” its share of PPL’s assets and liabilities in preparing its (DG’s) financial statements. When it does so, it eliminates intra-group (DG and PPL) transactions. Therefore, it’s possible that PPL’s balance sheet is larger than shown above. 
• What could such intergroup transactions be?  Intra-group company loans, accounts receivable payable by PPL, etc.

Now to the income statement.  

DG Info:  PPL Income Statement USD Millions
Year	NET REV	OPCOST	GPROF	CHGEQ	DOI/OCI
2016	223	100	123	-163	-286
2015	406	97	309	171	-137
2014	618	88	530	505	-25
2013	575	105	470	225	-245
2012	645	85	560	390	-170
2011	565	73	493	328	-165
2010	205	15	190	348	158

Technical notes:  

• Same methodology as with the balance sheet to convert the information DG presents on its share of income to the aggregate income for PPL. 
• As noted DG only presents PPL’s Operating Profit not Net Income. 
• Using the change in equity (CHGEQ) as a proxy for net comprehensive income, I have computed the amount required to plug the gap in CHGEQ.  This is labeled DOI/OCI.  Derived Other Income (including other expenses not in gross operating profit) and Other Comprehensive Income.  (AA's calculations are in red typeface.)
• Examples of OCI would be change in carrying value of PPL’s contractual rights, value of reserves, etc. 
• DOI would include the interest that PPL accrued on the unpaid KRG receivables.  Recall that when PPL reversed the interest at 9% DG’s share of the reversal was USD 121 million or roughly USD 346 million for PPL in aggregate.  However, the arbitral decision allowed PPL to charge interest at L+2%.  Looking at note 28 in both 2016 and 2015, the change in interest due is some USD 68 million, implying (note that word) that the net of the reversal of the 9% interest and the accrual of interest at 2% was USD 68 million or roughly USD 194 million for PPL.   

So with DG’s “wet corn” tucked under the “dry” corn, we’re left with questions about PPL’s balance sheet and its income performance before allocation of DG expenses to PPL. 

Other Sources of Information on PPL 

It would seem like we’re at a dead end. 

But there are other sources of information on PPL.  DG has four partners in PPL.  Crescent, OMV Austria, MOL Hungary and RWEST Germany.

Crescent is a private company and does not appear to disclose its financials.  You’ll find Crescent on the web at http://www.crescent.ae/home.html.  Note that the Chairman of Crescent is also the Chairman of DG. Other apparent members of the Chairman’s family are on DG’s board.  Crescent is DG’s largest shareholder and thus would have rights to seats on DG’s board.   

Having a bit to do at work, AA looked only at the financials of OMV and MOL.  Preparing info on PPL from RWEST is left as an exercise for the student. Expect an announcement soon on the opening of Arqala University!  It’s going to be a huge success more so than Arqala Steaks –also under formation. 

OMV Information on PPL 

Here’s the data compiled from OMV.

First, the balance sheet. 

OMV Info:  PPL Income Statement USD Millions
Year	Rev	Op Prof	OCI	NI	OMV
2016	223	149	0	149	16
2015	357	-258	0	-258	-26
2014	618	-373	0	-373	-37
2013	575	169	0	169	17

Technical notes: 

• Despite its 10% ownership share, OMV accounts for PPL as an equity investment because it has substantial control over PPL because as I noted earlier some PPL decisions require shareholder unanimity. 
• OMV reports data for PPL’s balance sheet and income statement so there is no need to adjust numbers. 
• OMV only began reporting separate data on PPL in 2014.  Before that PPL was aggregated with another equity accountee. 
• I’ve used year end spot exchange rates for the balance sheet (ECB) and averages for the year (IBRD) to convert OMV’s reporting currency (euros) to USD.   You’ll also find this info at the Deutsche Bundesbank with slight variations to the IBRD average rate, a cautionary note about the potential for “different” versions of the same data from well-regarded sources.  I used the IBRD average rate for HUF to convert MOL data so for consistency I used IBRD for OMV as well.  Where there was a lapse, e.g., 2016 average for the euro in the IBRD data, I used the Bundesbank data. 
• CA and NCA are current assets and non-current assets respectively.  The same C and NC prefixes are used for liabilities.

Comments:

• Three things of note from the OMV data.
• Noncurrent liabilities are disclosed.  Based on other information in both OMV and MOL’s financials, these amounts primarily consist of loans extended by shareholders to PPL.   The difference between NCLs and the derived loan balances may consist of accrued unpaid interest.
• Side Note:  The loans were extended at Libor plus 2% which both OMV and MOL describe as a “market” rate.  AA would like to borrow some money from a “market” that rates Kurdistan risk this low because AA could probably get a loan at Libor minus 2%.   
• In 2015 OMV restated PPL’s equity as of 2014 or more precisely marked it down roughly USD 1.5 billion.  There is no restatement of PPL’s equity in DG’s financials. 
• OMV’s calculation of equity is higher than DG’s for 2014-2016.

Now to the income statement.

OMV Info:  PPL Income Statement USD Millions
Year	Rev	Op Prof	OCI	NI	OMV
2016	223	149	0	149	16
2015	357	-258	0	-258	-26
2014	618	-373	0	-373	-37
2013	575	169	0	169	17

Comments:

• As you’ll note OMV did not restate income in 2015 for 2014 which AA believes indicates 2014 restated equity reflects a change in reserves or contractual value of PPL’s rights in the KRG. 
• Also OMV’s operating profit differs from that of DG.  It’s not clear what’s causing this, but AA believes it is the difference between gross operating profit (net revenues less depreciation and operating costs) as reported by DG and net operating profit (which includes other expenses) as reported by OMV.
• Not a particularly “pretty” profit picture.

MOL Information on PPL

MOL Info:  PPL Balance Sheet  USD Millions
Year	CA	NCA	TA	CL	NCL	Equity
2016	2,345	658	3,003	138	1	2,864
2015	2,123	686	2,809	88	229	2,492
2014	2,038	690	2,728	98	248	2,382
2013	1,415	716	2,130	49	253	1,829
R2012	1,122	734	1,856	24	490	1,342
2012	1,122	3,556	4,678	24	490	4,163
2011	684	3,582	4,266	28	644	3,595
2010	345	3,607	3,952	61	782	3,108

Technical Notes:

• Like OMV, MOL uses the equity method to account for PPL. MOL’s reporting currency is Hungarian Forint (HUF).
• It reports PPL’s aggregate balance sheet and income statement except for 2010-2012 when it reported only its share of the balance sheet and income.  Figures for those years have been divided by 0.1 to calculate PPL’s aggregate balance sheet. 
• I used the same IBRD source mentioned above for average annual rates for the HUF and laboriously copied fiscal year end spot rates from NMB (Hungarian Central Bank) website. 

Comments: 

• Both MOL and OMV report very similar balance sheets for 2014-2016 which AA takes as indicating that this exercise has produced a fairly accurate picture of PPL’s balance sheet for those years. 
• Note that their equity numbers are equal for the period 2014-2016 and different (higher) than DG’s. 
• But there is a significant difference between MOL and OMV regarding the restatement of PPL’s equity.  At MOL the restatement occurs in 2013 for fiscal 2012 and is a much larger amount USD 2.8 billion versus USD 1.5 billion at OMV for fiscal 2014.   It is unclear what caused this timing difference. 
• NCLs as reported by MOL track those reported by OMV.  With the longer data period at MOL we can see the shareholder loans have declined to next to nothing from roughly USD 782 million in 2010.  
• Looking at the change from 2015 to 2016 in NCLs, at a 35% share, DG received roughly USD 80 million in repayments from PPL in 2016.  Because these are intergroup transactions, they would not be reflected in DG’s consolidated statement of cashflows. 
• The USD 80 million was likely reflected in consolidated cash as DG’s 35% share of PPL’s total cash. Once payment to DG was made DG’s consolidated cash balance would not change.  If DG prepared and disclosed parent only financials, we should see the USD 80 million as a separate transaction there.   

Now let’s turn to MOL’s version of PPL’s income statement. 

MOL Info PPL Income Statement USD Millions
Year	Rev	Op Prof	OCI	NI	MOL
2016	223	235	154	388	0
2015	357	-188	293	106	11
2014	618	524	28	553	55
2013	575	470	17	487	84
2012	645	564	5	570	57
2011	565	494	-8	486	49
2010	205	192	5	197	20

Comments: 

• Similar to OMV, MOL’s restatement of PPL’s equity did not result in a restatement of net income which seems to bolster AA’s theory that this is a valuation change of contractual rights or reserve values. 
• But OMV and MOL part company on income. 
• MOL’s calculation of net income tracks closely the change in equity and is much large and more consistently positive than OMV’s.  OMV does not appear to consider OCI. Yet the difference between the two is apparently not solely the result of OCI. 
• Based on MOL’s calculation, PPL appears to be a highly profitable investment. 
• But there is a wrinkle here.  Despite recognizing larger net income, in 2016 MOL stopped accruing income on PPL shifting to a “cash basis”.    That is not a vote of faith in PPL’s prospects or the ability of the KRG to settle the trade receivables. 

Summary 

• We’ve been able to recreate PPL’s balance sheet in more detail than DG has provided.  This can serve as a basis for further analysis by other interested parties, e.g., sukuk holders’ advisors, equity analysts, and equity holders. 
• However, this exercise has not resulted in a completely identical set of financials.  As regards the balance sheet, there is an approximate 10% of so difference between DG’s value of equity and that reported by OMV and MOL.  
• More importantly for a meaningful analysis, there are striking differences in PPL’s income as reported by DG, OMV, and MOL. 
• DG only provides gross operating profit not net income or net comprehensive income.  The above mentioned “interested parties” may wish to push DG to provide additional information.  For starters, to disclose its calculation of PPL net comprehensive income before and after allocation of DG expenses. 
• OMV and MOL have very different net income figures for PPL. While PPL is a small fish in OMV’s and MOL’s operations, parties interested in those companies may also wish to understand more about PPL’s performance. 
• As noted, this does not seem to be solely the result of MOL considering OCI while OMV does not as OCI does not equal the difference between OMV and MOL’s figures.
• Interestingly, DG, OMV, and MOL are all audited by Ernst and Young, though it's important to note that each of the firms are legally separate partnerships within the global E&Y “family”.
• Differences among these companies' accounting for PPL is the result of differences in accounting practices. DG “consolidates” its share of PPL.   OMV and MOL use the equity method to account for their respective holdings in PPL. But, as noted above, OMV and MOL have remarkably different results for net income. 
• Finally, this approach to reconstructing/estimating undisclosed information by using other sources might be useful to bankers, investors, and other interested parties for a range of other transactions and obligors.  Where there is more than one partner in a venture and that partner is listed in a reasonably well regulated market, there may be disclosures available.  One can also look to counterparties to a transaction who may disclose details in their public disclosures that their counterparty does not. 
• Side Note: On that topic, early in AA’s career, a dearly respected white-haired mentor told AA how a colleague of his had recreated a rudimentary set of Aramco financials from SEC-mandated disclosures by the listed US oil companies who were Aramco shareholders at the time.  This chap later off-handedly discussed key elements of Aramco’s financials with the company, much to the consternation of Aramco officials who were concerned about the reaction of the “new” Saudi shareholder.  

Qatar Banking Sector: How "Grim" is Grim?

Sure Sounds Much Scarier Than Subdued

AA was in grave danger of slipping further into his monomania on Dana Gas, until Gulf News (Dubai) rode to his rescue with this timely 8 August article:  “Qatar banking system faces grim outlook as sanctions bite”.

“Grim outlook” sure sounds serious.  If Indian banks are facing “subdued” prospects, then Qatar has to be in even worse shape.   

The article’s argument appears based on the following: 

1. Moody’s has placed Qatar’s banking sector on ratings watch negative, a change from stable.  The other rating agencies have taken steps as well.  S&P bumped Qatar’s sovereign rating to AA-.  Fitch has placed Qatar’s AA sovereign rating on its watch list.  In case you don’t know, investment grade extends all the way to BBB- or Baa3. Qatar banks are more dependent on external funding than earlier. 

2. External funding may be withdrawn and the Qatar government’s ability to support its banks has weakened.

3. Qatar’s banks have a “lot” of cross border assets in the GCC and MENA.  AA isn't sure if this is a credit warning about these borrowers ability to repay or about government action to prevent payment.

4. Moody’s expects non-performing assets to increase from 1.7 % at FYE 2016 to 2.2% by FYE 2018. Moody’s also expects ROA to decline from 1.7% for fiscal 2016 to 1.4% for fiscal 2017.

GN’s assessment seems to be based on two things.

1. First, some negative things might occur, e.g., external funding withdrawal, ratings drop, etc. At its current rating Qatar could drop a notch or two and still comfortably be investment grade.  More importantly, things that might occur do not necessarily occur.  Or when they do, there may be solutions. Those with long memories or mentors who lived in exciting times will remember that when international banks cut off funding for the Kuwaiti-owned banks in Bahrain following the Iraqi invasion of Kuwait, the KIA rode to the rescue.   

2. Second, there is negative trend in two metrics:  ROA and ROE. It’s not clear to AA if GN believes that the change in NPA (a 30% increase) or ROA (an 18% decrease) is driving Qatar banks to “grim” territory or whether it is the absolute levels of these figures. 

Let’s put those metrics—ROA and NPLs— into context with a chart drawn from  pages 10-11 in the KPMG report on GCC 2016 banking performance. 

Two things to note about that report. 

• It covers listed banks and not all banks.  Despite the sample composition, the report should provide a directional idea about relative performance. 

• That presumably explains much if not all of the difference between KPMG’s figures and Moody’s who are including unlisted banks in their calculations. 

GCC Banking Performance
	ROA		NPL
Country	2015	2016	2015	2016
Bahrain	1.0%	1.1%	10.7%	9.8%
Kuwait	0.9%	1.1%	2.1%	2.1%
Oman	0.5%	0.8%	1.9%	2.0%
Qatar	1.8%	1.5%	1.7%	1.9%
Saudi	2.0%	1.7%	1.1%	1.3%
UAE	1.4%	1.3%	4.1%	4.0%

Based on the above data, it would seem that using GN’s definition things are at least somewhat grim in the UAE and even more so in Bahrain, Oman, and Kuwait. 

Perhaps, this is Qatar’s way of re-integrating itself into the GCC?

But there’s more. 

Notice that the chart in the GN’s story shows a decline in ROA since 2011 well before sanctions on Qatar had been “born” or had molars to bite, though this may be a testimony to the wise leadership's ability to position for necessary future action.

A January GN article quotes Moody's projections for GCC aggregated banking performance in 2017.  Using that projection as a baseline, it would appear that the "grim" Qatar banking sector will outperform the average GCC bank. 

As to the health of GCC country finances in a low energy price environment and thus their ability to support their local banking sector and economy, there’s a Fitch 5 April report that provides some insights. 

Based on its forecasts for the average 2017 oil price and country projected spending, among the GCC states only Kuwait (USD 45) and Qatar (USD 51) have a break-even price below Fitch’s estimated USD 52.50 barrel price for oil.  Kuwait’s break-even price was influenced by its “high investment income”. 

Bahrain is at USD 84, Oman at USD 75, KSA at USD 74, and Abu Dhabi at USD 60.   Details here. 

Mark AA as skeptical on GN’s assessment which seems more like foreign policy advocacy in search of a “victory” than hard analysis. 

It's a bit early to make a call on the effectiveness of sanctions or of Qatar's workarounds.

A grim scenario may occur, but Qatar has abundant resources to fight sanctions and at present retains access to world financial markets.  One could the case of other sanctioned countries with less financial resources or access to financial markets to draw some conclusions about ability to weather a storm.  Hufbauer et al "Economic Sanctions Reconsidered" may be a useful entry point to such a review.

There is is a more nuanced less alarmist view on Moody's report--as appears to be the usual case--at Abu Dhabi’s The National. No “biting” no scenarios of doom.

Dana Gas Strategy From Clever Boots to Clever Socks?

DG's New Strategy May Be Actually More Clever Than Depicted Above

As you’ve no doubt heard, following rejection from its creditors, Dana Gas withdrew its imagined generous offer of an exchange bond stripped of the conversion option and at an “attractive” 3% fixed interest rate compared to the 9% the Company paid until its moral principles “forced” it to withhold payment because “evolving” interpretations of Shari’ah voided the “Islamic” character of the sukuk. 

At that time according to press reports (Reuters here), the Company said it would pursue "litigation-driven outcomes". 

An initial assessment might be that Dana Gas has taken further leave of what scant senses it might have had.  Scant because its “clever boots” first strategy seemed an unnecessary provocation to the creditors and unlikely to succeed.  DG has a perfectly viable argument for a restructuring without resorting to what are almost certainly distortions of Shari’ah. 

On that score the uncharitable out there among you might say why should there be a difference between overall management of the business and financial management.  AA who fancies himself a charitable sort would of course never make such a comment. 

According to the report by Bloomberg, DG’s “evolved” strategy is based on successfully litigating one of the two following outcomes: 

1. Unwind the sukuk transaction from origin, repay the outstanding principal (roughly USD 690 million) but offset the allegedly now non-Shari’ah compliant “profit” (interest) payments made over the life of the sukuk (some USD 635 million over the life of the transaction). 
2. Convert the sukuk to equity in the Trust Assets (note the potentially fatal limitation agreed by the Sukuk holders in their initial irrational exuberance).  Based on profit earned by the Egyptian assets and the value of these assets now, DG reportedly believes that the sukuk holders owe it USD 150 million.  Details in the Bloomberg article.   

Abu Yusuf certainly has been a busy chap parsing the law.

Some observations. 

At first hearing a litigation-driven strategy sounds like a crackpot idea.

But there have been rulings in the past by UAE courts (Abu Dhabi based) that support such an approach, though AA understands that judicial precedent is not binding in the UAE. Back in the 1980s or thereabouts, UAE banks’ practice of lending on an overdraft basis and capitalizing interest “came a cropper” when borrowers couldn’t or wouldn’t pay.  NBAD took one such borrower to court.  The borrower noted he had recently “seen the light” and as a good Muslim could not pay interest as it would violate Shari’ah.  Producing bank statements he “proved” that on a cash-on-cash basis he had already repaid the original principal amount of his borrowings and more.  The learned judge ruled in his favor.  NBAD had to issue a check to the borrower for some million AED (the “overpayment”) and cancel the balance of his loan on its books.  One would hope that there has been change in judicial thinking in the Emirates since then but one doesn’t always get the “hope and change” wished for.   

As I read DG’s initial announcement, a key point of DG’s strategy is the assertion that evolving interpretation of Shari’ah made the transaction non-compliant. 

One could argue that that means that at some point the transaction was Shari’ah compliant.  If that is the case, then the date the transaction became non-compliant becomes very important in terms of the legality of profit payments.  Those before the new interpretation were perfectly halal.  Those after not. 

One might argue that the date of DG’s announcement of non-compliance is prima facie the date of non-compliance.  If DG were aware of non-compliance before that date but were silent, then should it be subject to paying damages to the sukuk holders perhaps equal to or greater than the profit payments they received between the end of Shari’ah compliance and the date of announcement?  Does Shari’ah impose a greater obligation on a mudarib with respect to rab al maal than a conventional loan arrangement would?

If Shari’ah holds that a change of interpretation is retroactive back to the inception of the transaction—which AA doubts--, then despite their best intentions the parties did not actually agree to a Shari’ah based transaction but instead agreed to conventional (non-Shari’ah) bond.  If so, then shouldn’t the non-Shari’ah terms as negotiated and agreed by the parties bind the parties?  Indeed with this development, might the sukuk holders be entitled to insist on a non-Shari'ah bond?

A telling point could well be if DG has engaged in non-Shari’ah based transactions.  This would establish that they do not only finance on a Shari’ah basis. As to the first point, on page 78 of its 2016 annual report Dana refers to the “Shari’ah tranche” of the Zora financing which clearly means there was at least one non-Shari’ah tranche to this financing.  That indicates to AA that DG’s conversion to “Islamic” principles is of recent date and no doubt feigned. 

As regards Scenario #2, the Bloomberg article contains an assertion ascribed to the Company that the Egyptian assets only generated USD 60 million during the life of the sukuk.  If the Bloomberg report is true, this is a rather shocking admission by DG’s management of failure.  Equity holders may want to take note.

More to the point, sharp-eyed creditors, pardon me, the creditors have demonstrated scant sharp eyes so far so let AA rephrase. The creditors’ advisors will no doubt parse this calculation carefully.  Presumably it does not include “profit” (interest) payments because the determination of profit is before the sharing of profit between mudarib and investors. 

As regards the USD 450 million valuation for the Egyptian assets, Section 3.2 of the offering memorandum refers to the distribution of the “realisation of the net proceeds” the Trust Assets.  AA is no lawyer but that would seem to argue that DG cannot merely give the sukuk holders shares in the Egyptian venture based on its own valuation, but rather that the Egyptian assets have to be sold.  If the proceeds are not enough to repay the sukuk, other of the Trust Assets have to be sold.  Since this is a limited recourse transaction, if all the Trust Assets are sold and the sukuk is not redeemed in full, then the creditors have no further recourse.  Requiring sale of the assets could upend DG’s strategy of claiming funds back from the creditors.  It is not without danger to the creditors given the limited recourse nature of the sukuk.  But since the creditors have a weak hand given that feature of the deal, a credible threat to “wreck” the Company might bring it to its senses.  If not the sukuk holders might take comfort in making DG share their pain. 

That DG has adopted this highly risky second strategy suggests to AA that DG believes it has a good chance of winning the case, plans to beat creditors into submission though interminable court action in the UAE, or has run out of viable alternatives.  That is, this is a desperation play:  the Company sees no other option.  That implies that DG’s management has assessed that DG’s value is minimal.  The rejected four-year deal would have given breathing space for a miracle in the form of the receipt of a substantial arbitral payment, collection of receivables, etc.  With that deal off the table, the state of the emperor’s clothes or lack thereof will become obvious. 

As regards, victory in the courts or prolonging the legal battle, perhaps the “fix” is already in the home town court.  As noted in other posts at SAM, the December hearing date is one indication.  Another is the complex but highly convenient requirements of the Sharjah court to lift its injunction frustrating DG’s ability to comply with the London court’s requirements.

Alternatively, DG may be hoping to drag matters out in the lengthy judicial process in the UAE’s fine courts similar to the roughly six-years of legal to-ing and fro-ing  between the National Bank of Umm al Quwain and Global Investment House Kuwait, hoping that this will wear the creditors down. Some details here on that epic legal battle which was finally “settled” via an out of court settlement. 

AA hopes that Emirati courts and rulers understand the impact a court decision in DG’s favor would have on the legal credibility of the UAE judicial system, local companies’ access to cross-border financing, and more widely on “Islamic” finance beyond the UAE.   

AA notes, however, that “hope” isn't really a basis for investments or for correcting problems with investments.  As to AA's judicial "hope", “change” may as well prove elusive.