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Memery Crystal pens a suicide note for African Potash - lawyers letter for Tom Winnifrith

By Tom Winnifrith | Friday 2 September 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.

Bully boy lawyers Memery Crystal want me to pay its costs, damages to the fraudsters at African Potash (AFPO), to unpublish 18 articles about the fraudsters and not to write again pointing out that African Potash has committed fraud. But the lawyers letter itself offers fresh admissions that massive fraud has taken place. The lawyers also warned me not to publish what is effectively a suicide note for Potash, i.e the Memery Crystal letter (sent incidentally to the wrong address, a made up email). So...

You can read the full letter HERE

This letter is a bombshell and guarantees the death of Potash. It should forget about suing me and should go after Memery Crystal for this effort.

Specifically if you read the letter carefully you will note::

The announcement of 6 January 2016, according to this letter, "sets out the terms of an anticipated transaction" by African Potash. That is not how the RNS was phrased at all in that the RNS says Potash "is delighted to announce the despatch of 20,000 MT", under a sale agreement that "had been signed" with the statement that goods will arrive with a customer within 3-5 days at which point "Payment by the buyer will be made via a Letter of Credit from an internationally accredited bank within 30 days of delivery of the Urea Stock."

You cannot anticipate matters that are in the past tense, that is to say which have already - according to the RNS - happened and readers would do more than anticipate other matters that Potash said will (that is definitive) rather than "may" happen.

And so on 6 January Potash made statements via RNS not of what might happen but what will happen or has already happened. But they did not happen. Potash said delivery would happen within 3-5 days, i.e. by January 11. But it did not. Instead of informing the market of the true position Potash undertook a major placing on January 12. Even on February 9 Potash announced a lack of payment via RNS, so one assumed goods had been delivered as per the January 6 schedule. Only in late March did Potash admit that delivery had not taken place at all. It should have revealed tyhat before the January 12 placing not 2 months later!

So not only did Potash not keep the market informed in a timely fashion but the initial RNS was not true either. Potash did not, as it now acknowledges, have a Letter of Credit signed on 6 January. In fact as Potash admitted in an RNS of April 2016 it did not even have a purchase order for 20,000 MT merely an offtake agreement for up to 20,000 MT which is totally different.

I would also add that as the delivery was said to be within 3-5 days, if delivery had not been made by 11 Jan, then there was an obligation to provide an update, i.e. at latest on the same day that the placing was announced. There was no update. Surely those taking part in the placing as well as the wider market had a right to know the true facts?

In short Memery Crystal is admitting that what Potash said was fact on January 6 was just something it hoped would happen and on the basis of that the shares raced ahead allowing a placing. That is damning. It is game over for Potash. This is a clear admission of Securities fraud and I have lined up a series of respected Nomads who will testify to that effect as expert witnesses.

The lawyers letter also admits that an RNS of December 1 2015 was also misleading in that what was termed an "agreement" is, in fact, now admitted by Memery Crystal to be no more than a non binding MOU. Jeepers - how misleading is that? Worse still Potash insists that this allows it to omit clauses which could trigger a £600,000 liability though those clauses have the same legal standing as the "good bits."

To lay out only benefits and not any liabilities is unfair to investors. In that sense it is misleading and to do so 43 days ahead of a fund raise adds to the already compelling evidence that Potash has committed utterly blatant Securities fraud.

It goes without saying that I have not agreed to the demands of Memery Crystal instead I shall see the bitchez in Court.

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