By Nigel Somerville, the Deputy Sheriff of AIM | Monday 17 October 2016
Disclosure: I own shares in one or more of the stocks mentioned. 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.
Tom Winnifrith has already commented on the appalling mess at AIM-listed New World Oil and Gas. I shall not repeat any of that, but there is one angle to this which is worth mentioning, and it regards the looming deadline as regards the suspension of the company’s shares from trading. Under AIM Rule 41 you get six months and then you are booted off the Casino. Except when you don’t…..
Shareholders will be a tad concerned, as New World has been in suspension since 9 May and in the absence of things getting sorted out quickly, it would appear that under AIM Rule 41 it is therefore due to be given the order of the boot on 9 November, the six month deadline.
With this morning’s update that an issue has arisen in connection with a previous transaction carried out by the Company which may have a material impact on its financial condition and that the previously proposed RTO is now all off as a result, the question arises as to how things might be resolved on or before 9 November – just over three weeks away – in order to get the shares out of suspension and avoid delisting.
There is, however, a recent precedent which might offer hope to shareholders that the six-month deadline may not be quite as pressing as we might fear.
Having lambasted AIM Regulation for failing to give ShareProphets AIM-China Filthy Forty play LED International Holdings (LED) the boot after it had been suspended for over six months, I was specifically told that the reason was that the basis for suspension had changed.
In the case of LED, it was originally suspended because its FY15 accounts were delayed. When they were finally published (almost six months late, and plastered with audit qualifications and a material uncertainty raised in the going concern statement) those shares remained suspended, pending publication of interims.
That was good enough for AIM Regulation to ignore the plain English wording of AIM Rule 41 – until Nomad Allenby did the decent thing by resigning and forcing a trip to the AIM execution chamber.
And so we are now in a strange position. New World was suspended pending publication of formal paperwork regarding the proposed RTO with Big Sofa. Now that the deal is off, it is no longer suspended pending that paperwork.
Indeed, we are told today that shares in New World will remain suspended pending clarification of the situation and thus we have a new basis for suspension.
The question now is whether AIM Regulation will apply its own rules consistently. If it can’t understand the plain text of its own rules - as was patently the case with LED, the least that the oxymorons can do is offer some level of predictability as to interpretation.
If so, there seems to be another six months for the saintly Adam Reynolds and Nick Lee to sort the mess out…..if, indeed, it can be sorted out.
Meanwhile I add my voice to demands that Roland Cornish be stripped of his QE status, and that the firm of Beaumont Cornish be stripped of its Nomad license by AIM Regulation. This cannot be allowed to stand and just this firm’s handling, as Nomad, of this one client has brought the Casino into stunning disrepute so many times that the long reign of this establishment stalwart has to be terminated forthwith.
We could then at least celebrate the end of an error.
Never miss a story.
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