According to Mr Rivkin, the shortfall of the rights issue, 825,135 shares and 412,557 options, fell into the hands of the underwriter at the issue price of $1.20 only days before Canadian-based Ensign launched its $1.80 per share bid. This resulted in a paper profit of $495,081 for the underwriters.

"What a generous bonus to the underwriters, which I don't believe would have occurred had the rights been renounceable," Mr Rivkin said.

Ensign has not yet submitted its offer documents for the takeover bid.