Wednesday 22 February 2017 The one stop source for free breaking news, expert analysis, and videos on AIM and LSE listed shares
Kerboom: African Potash - how it misled investors massively in August 2015 - new document arrives
By Tom Winnifrith, The Sheriff of AIM | Thursday 5 January 2017
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.
It has already been demonstrated here by the publication of leaked documents that African Potash (AFPO) lied to investors via RNS in November 2015 and January (6) 2016 in order to get a placing away. Now another document has fallen into my possession which shows how Potash misled mug punters into piling into the shares on August 4 2015 as it announced "Landmark Trading Agreement with COMESA". Sadly for CEO Lyin' Chris Cleverley I have the original MOU which we can now compare and contrast with the RNS. Oh dear. Kerboom!
Let's start with the RNS which states:
African Potash enters into three year fertiliser trading agreement with COMESA to supply and deliver at least 500,000 metric tonnes ("MT") of fertilisers on an annual basis during an initial three year period to off-takers identified and introduced by COMESA
Near term revenue potential and a strong customer base expected as a result of the trading agreement.
Under the terms of the Trading MOU, which is an implementation of ACTESA's Five-Year Strategic Plan, African Potash and MACFF will supply and deliver at least 500,000MT of fertilisers to off-takers identified and introduced by COMESA, during an initial 3-year period (subject to a mutual renewal term of 10 years). COMESA will receive a commission fee of between 5 - 7.5% from sales made pursuant to the Trading MOU and will, amongst other matters, use its best endeavours to assist on any government related issues in COMESA member states relating to the implementation of the Trading MOU and generally assist and support the implementation of the Trading MOU.
Great news. Revenues soon an African Potash WILL supply at least 500,000 MT. Note the use of the word WILL. Not May but WILL. It is a definite statement.
Now let's look at what the MOU actually says
Article 1 Objective
The parties agree to work together to support and develop a common framework to finance, supply and deliver at least 500,000 metric tonnes of fertiliser in the first instance - composition to be agreed (hereby referred to as "the product" ) and further contracts to be agreed for the benefit of Africa for a period of 36 months after which the arrangem0ent will be renewed subject to mutual agreement for a further period of up to 10 years
Article 2 - specific areas of obligations and co-operation
Each party will subject to laws, rules, regulations and national policies from time to time will use beast endeavours in respective COMESA member states, governing the subject matter, endeavour to take such steps as are necessary to encourage and promote co-operation in the following areas.
a) COMESA/ACTESA to identify potential off takers and submit the list for vetting to MACFF and AFPO
b) ) COMESA/ACTESA will not have any obligation whatsoever relating to the performance of the off takers recommended to MACFF and AFPO
c) ) COMESA/ACTESA will use its best endeavours to assist MACFF and AFPO on government related issues that require intervention in COMESA member states. However COMESA/ACTESA does not guarantee the outcome of the intervention.
d) COMESA/ACTESA will not incur any financial liability relating to this transaction
e) COM$ESA/ACTESA will use best endeavours to assist and support Mask Africa and African Potash and endeavour to establish a working framework for all parties.
Nomad Cantor Fitzgerald and specifically bankster Stuart Dickson (let go by CF this autumn) should - in order to avoid charges of negligence demanded to see the original MOU before signing off the RNS. But if they did do that how on earth did they sign off the RNS?
The MOU talks about establishing a framework with an aim of securing 500,000 MT of orders but Comesa is putting up no cash and its only obligation is to supply names of potential customers and there is no comeback if those names are hopeless.
Yet the RNS refers to how the agreement says that Potash "will supply" indeed it states as a fact, not an opinion, that there is "near term revenue potential and a strong customer base expected". There is nothing in the MOU which gives any indication of near term revenue potential (so that is just a claim made with no evidence by Lyin' Chris) and the MOU pointedly states that there is NO Customer base at all, COMESA may help to identify one.
Thus those folks who paid up to 3.5p per share in the spike this created, bought shares on the back of a false prospectus caused by the lies pumped out by the board of Potash and the negligence of Cantor Fitzgerald in not verifying that the claims made were untrue.
As such I'd urge anyone who has lost money by buying into the August/September share price spike should contact me at email@example.com as I work with lawyers to see if Cantors and/or the directors can be sued.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.