By Tom Winnifrith, The Sheriff of AIM | Thursday 6 October 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
On 1st September AIM listed fraud African Potash (AFPO) demanded that I pay it money, withdraw all my articles about it and promise never to write again. It stated that if I did not comply by 4 PM on 2nd September it would be forced to take legal action against me. I told the bitchez at fascist lawyers Memery Crystal that I was 2 nil up against its fraudulent clients so far (Globo and Pirate Pete Landau), that I could not wait for disclosure that would bring me a hat-trick and that I'd see the bitchez in Court. So where are we now, a month later? Er....
The PR advisers to Potash have quit, sick of having their names attached to lies. Stewart Dickson, the Nomad who signed off on its untrue releases has been "let go" by Cantor Fitzgerald. The company is rapidly running out of cash. And, to misquote Neville Chamberlain, "I have to tell you that no such legal action has been received" and thus shall we just accept that African Potash is now admitting that it has committed wholesale securities fraud in telling monstrous lies and making monstrous omissions in order to get a bailout placing away.
I am disappointed. The disclosure process would have revealed so much more about the fraud at Potash not least the payments it made to Beryl Holdings in December 2015 and early 2016 as bungs, bungs it neglected to mention in the RNS of December 1. This is a lawyers letter I really wanted, a libel case I would have loved. Just think of the fun we would have had after the disclosure process got underway asking Labour peer Lord Peter Hain what he knew about those bungs and about the lies told in the RNS statements of 1 December 2015 and January 6 2016? Oh boy, Lord Hain we could have had such fun.
But there has been no lawyers letter as promised. Academic studies show that shares in companies that respond to bearish comment with the threat of legal action but which do not follow through are very poor investments. A high percentage of such firms go bust. And with African Potash shares now down to a new low of 0.17-0.18p the writing is on the wall. This company will need to do another bailout placing before Christmas but given its is now making a tacit admission that it had engaged in fraud, why should anyone back it?
My target price is a clear 0p.
While we watch the death throws of Potash a caption contest in honour of a company that cried wolf, or rather "libel letter". Another caption contest in honour of lyin' Chris Cleverley - the man with the worst CV of any AIM CEO - and his senior NED, the adopted Welshman Lord Peter Hain. The deadline is midnight on Thursday, do your worst in the comments section below.
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