The cash raising by placements to the top end of the market is looking even grubbier after the latest effort from big shareholders in the National Australia Bank.

The way shareholders got preferential treatment yesterday from the NAB, which wanted to raise $2 billion quickly, but then “stagged” most of the shares and took a free profit, was disgusting.

The numbers tell the story.

In a statement to the ASX, NAB that it had placed 93,023,256 of new shares at $21.50, compared with the bank’s share price of $23.58 when the placement was announced.

Yesterday, NAB shares fell 5.2%, or $1.23, to $22.35 after trading resumed to allow the company to raise that $2 billion from big shareholders. That gave the selling shareholders a gross profit of more than $45 million on the day.

But many of those who received the shares sold for a profit: more than 59 million shares, (or well over 60% of the 93 million issued in the placement) sold for gross proceeds of $1.299 billion. Hardly a vote of confidence in the bank.

That helps with their funds’ performance, keeps fees flowing in from investors for making that profit, and adds to the earnings of those managers. It’s now clear the top end of the market views these fund raising efforts as a way to make easy profits in the current environment. Soon, the $2 billion will start weighing on the minds of investment bankers and brokers who will start urging deals and takeovers to liberate it and start the cycle once again.

Today the trading volume in NAB shares was solid, but near normal: over 4 million shares done by 11am. NAB shares edged higher while yesterday’s lemming-like stampede to sell the shares and crystalise profits vanished.

But a question over the fund raising remains unresolved. Buried in all the talk about what NAB planned to do with the money (war chest some claimed, for small takeovers) was this curious statement from the bank about factors that led to the need for more capital.

The NAB said that even though the $925 million Aiva purchase hasn’t gained official approval, “APRA requires a deduction to be taken as at 30 June 2009 notwithstanding that the acquisition has not been completed”.

Now, that’s the first time I can clearly remember the banking regulator being mentioned in a statement by a major bank about a takeover or capital move. There was no mention of this when the Aviva bid was revealed a couple of weeks ago, before the end of June.

So APRA’s direction must have come after that.

The question now is whether APRA is back taking a closer look at the NAB than we know of. It did so back from 2004 for a couple of years in the wake of the $360 million on Forex options losses that were allowed to happen by poor management and slack board supervision. But for all intents and purposes, APRA freed the NAB from its close watch list more than 2 years ago.

But then there’s this story that was circulating on by the local AAP newsagency a couple of weeks ago which indicates that APRA might be still closely monitoring the NAB:

AAP reported that:

National Australia Bank Ltd (NAB) could be prompted into a capital raising to cover losses of almost $4 billion from its portfolio of toxic debt that is being investigated by the nation’s prudential regulator, analysts say.

The Australian Prudential Regulation Authority (APRA) has been in talks with NAB for two months over the most appropriate method to value the $17 billion toxic debt portfolio.

The structured credit portfolio was held in nabCapital and includes corporate bonds, commercial mortgage backed securities, collateralised debt obligations (CDOs) and synthetic CDOs (SCDOs).

All are being held on a hold-to-maturity basis and analysts say any write-downs could cost shareholders $3.9 billion.

If this is in any way the case, has the market been trading uninformed?