Worthington fraud part 17: Doug Ware running scared and meanwhile can he explain why his financial adviser quit – another leaked letter emerges?

Comments

1. ---

   turbograndad

   27 February 2015, 03:38

   Tom,
   Hubble, double, toil, & trouble, & graft.

2. ---

   hammer69

   27 February 2015, 06:46

   Tom,

   The critical facts from the letter are the date of resignation (the day after a second ultimately misleading RNS re Sevco 5088 acquisition) and the fact that the resignation is BACKDATED to 5th April, ie before the initial ultimately misleading RNS re that acquisition.

   See below from ADVFN BB:

   tawnyport 21 Feb’15 – 21:04 – 3889 of 3889 0 0 edit

   Law Financial is the key to this train wreck, and I have think I have just managed to open the door.

   It all starts with:

   i) Acquisition announcement of 17/04/13:

   http://otp.investis.com/clients/uk/Worthington/rns/regulatory-story.aspx?cid=790&newsid=395040

   Pertinent extracts:

   “The eventual aggregate purchase price for 100% of LFL will be £1m in unsecured convertible loan notes plus 33.33% of the proceeds of any assets, claims or rights currently owned by LFG or transferred to LFG or Worthington pursuant to the agreement payable in non-convertible unsecured loan notes which may be redeemed for cash at the option of the holder at any time after six months of issue. The Company’s option to acquire the balance of the share capital of LFL is exercisable until October 31st 2013.”

   “The Company has also been granted an option to acquire the remaining share capital of LFL. The full acquisition would be subject to shareholder approval and compliance with any applicable Listing Rules.”

   ii)Update re Law Financial dated 24/04/13:

   http://otp.investis.com/clients/uk/Worthington/rns/regulatory-story.aspx?cid=790&newsid=395041

   Pertinent extract:

   “The Company is pleased to announce that Law Financial Ltd (“Law Financial”), its 26% owned associate, has now entered into a Conditional Fee Agreement in relation to claims that Law Financial, through its subsidiary Sevco 5088 Ltd and separately, has to all of the business and assets of The Rangers Football Club (“Rangers”) which were purchased from the Administrators of RFC 2012 Plc by Sevco 5088 Limited, or Sevco Scotland Ltd, in June of 2012.

   The principle terms of the Conditional Fee Agreement are as follows:

   Solicitors and Leading Counsel acting for Law Financial will share 7.5% of the recently issued and to be issued unsecured convertible loan stock and up to 18.5% of any successful claim in relation to the business and assets of Rangers.”

   The next RNS issued by WRN was its suspension for not filing Mar’13 Annual Report.

   What does this mean?

   Shareholders were told the full acquisition terms were WRN had an option to acquire 100% of LFL for £1m in CLNs (note no mention of conversion price) plus 51.83% (33.33 + 18.5) of the proceeds of claim. If WRN wished to take up its 74% option then shareholders would be asked to approve same.

   The next update on LFL was amazingly within the results announcement of 29/08/14:

   http://otp.investis.com/clients/uk/Worthington/rns/regulatory-story.aspx?cid=790&newsid=441916

   Pertinent extract from the CEO’s statement:

   “On 16th April 2013, the Company acquired 26% of the shares in Law Financial Ltd in exchange for £250,000 of Unsecured Convertible Loan stock 2020, with an option to acquire the remaining 74% of the shares by 31st October 2013. This option was exercised on 28th October 2013 and the remaining shares were acquired in exchange for £750,000 of Unsecured Convertible Loan Stock 2020. The Unsecured Loan Stock 2020 includes warrants to subscribe for 20m ordinary shares in the Company at an exercise price of 5p each, subject to a share capital re-organisation being approved by shareholders.”

   OK, now we learn:

   i) LFL deal completed 28/10/13, was not RNS’d and approval was not sought from shareholders.

   Not very good, but shockingly compounded by:

   ii) Shareholders now advised well after the event that deal terms now no longer envisage also sharing of 51.83% of the proceeds of the claim, but instead mass dilution of 20m warrants to the vendors at 5p.

   But it gets far far worse, let’s go to the 2013 Annual Report:

   From note 19:

   “On 16th April 2013, the Company issued £1m of Unsecured Convertible Loan Stock 2020.”

   And from note 22:

   “During the period, warrants to subscribe for new ordinary shares in the Company at 5p, subject to shareholder approval of a share capital re-organisation, were allotted as follows and are outstanding as at 30 September 2013:-

   No of Exercise Date Expiry
   Ordinary Price Issued Date
   10p shares
   Share placing warrants 2,500,000 5p 06.08.12 06.08.17
   Secured Loan Stock holders 2019 (note 19) 2,590,378 5p 28.01.13 28.01.18
   Unsecured Loan Stock holders 2020 (note 19) 20,000,000 5p 16.04.13 16.04.18
   Directors’ Warrant issue 10,000,000 5p 06.09.13 06.09.18”

   The pertinent point that is skewed by the formatting of the table is this:

   THE ISSUE DATE OF THE 20,000,000 5p WARRANTS WAS 16/04/13!!!!!

   And so to put it in plain English for the uber bulls…

   The final terms of the deal, as first advised to shareholders on 29/08/14, had actually been agreed 16 months earlier on 16/04/13, and the CLNs and associated warrants issued on that date.

   And yet selective amnesia must have overcome the CEO as the 17/04/13 and 24/04/13 RNS’ made absolutely no reference to the 20m warrants and instead referred to sharing %s of the proceeds (note no mention of these in the 2013 Annual Report).

   THEREFORE THOSE RNS’ WERE COMPLETELY FALSE AND ALMOST CERTAINLY DELIBERATELY MISLEADING!!!

   Am amazed that this has actually been hidden in plain sight!

   How in heavens name WRN’s auditor signed off on this is unbelievable, they have a duty to review all published RNS’, and especially since without an audited Annual Report WRN could not re-list.

   If WRN goes tits up, Shipleys LLP should be first in line for a PI claim.

   Try explaining your way out of this WRN!!!

   NB to ADVFN: Above facts again all sourced from publicly available information!

   TP