By Tom Winnifrith, The Sheriff of AIM | Wednesday 4 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.
You may well remember that one of the frauds committed by African Potash (AFPO) in November 2015 was the announcement of a ramptastic deal with Beryl Holdings. The company announced all the good bits ( which as it happens failed completely to materialise in any way shape or form) but neglected to mention a £600,000 bung it had agreed to pay to Beryl. Unfortuanately for lyin' Chris Cleverley I got hold of the contract and pubished it and also alerted auditors RSM Tenon to its existence.
RSM Tenon admitted to me that it was aware of the matter and assured me that the contracts with Beryl had been reflected in the accounts for the year to June 30 2016. but where?
Where has that bung been reflected in what is,a bloated cost base? If it is indeed there - or at least in part for African Potash is cash strapped and may not have paid in full - then the current corporate adviser on the NEX market ( ISDX as was), Peterhouse Corporate Finance needs to establish where it is and why Potash did not reveal the clause when announcing the deal, indeed why it has denied that there was a bung even though I have published the contract that proves there was.;
Having chatted to my man in London my belief is that the Zambian grain venture is connected to the bung. This was a venture that Potash mentioned not once via RNS during the year but which cropped up as a footnote to the accounts thus
During the year, the Company incurred a loss of $378,000 on a prospective grain trading venture which was not consummated following the ban on the export of maize from Zambia, which was imposed in response to the severe regional drought.
As I noted yesterday, how on earth can you lose so much on a venture which did not actually do anything? Is this a way of explaining away some large payments to Beryl? Would the losses on this venture have started in a big way around December 2015 by any chance?
But where to "lose" another c$420,000 in the accounts? Well there was a ballooning of legal and professional fees last year and also of general consultancy fees. it should not be hard but the £600,000 bung was meant to be described as an "investment" as per the original November 2015 contract. It is all a bit of a mystery.
However auditor RSM Tenon knows the answers and I suggest that unless it explains all to Peterhouse Corporate Finance - as well as to any Nomad daft enough to consider acting for Potash - no adviser with any integrity should be prepared to act for this fraud a second longer.
Never miss a story.
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.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |