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Filthy Forty Taihua – Another letter to AIM Regulation: still no website, still no buy-back, still no update on related party receivables.

By Nigel Somerville, the Deputy Sheriff of AIM | Tuesday 10 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.

ShareProphets Aim-China Filthy Forty play Taihua (TAIH) is having a giraffe. The buy-back announced last August, to be paid for from an Open Offer long since completed hasn’t happened. There has been no update on the matter since the end of September. The accounting matters over related party receivables which the company, in its FY15 Annual Report promised an update on has seen no further comment. The website has disappeared, meaning that the company is in breach of AIM Rule 26 – a matter I raised with AIM Regulation on 29 December last year.

Since then, the oxymorons have acknowledged my missive (last Wednesday) but still there is no sign of the company’s website. In fact the technical wizards of the ShareProphets interweb department have been unable to trace an impression of the company website dating any later than October 2016 – shortly after the company completed its Open Offer to fund the share buy-back which hasn’t happened. The last we heard from Taihua on that matter was at the end of September, when we were told that details of the mechanism would be announced “shortly”.

And, of course, there are some accounting Red Flags (as discussed HERE) which one would have thought wanted clearing up.

Now some may prefer to think that all is well, and that there is a perfectly rational explanation for all of this. That is why we have selected this share for the Sham Sheriff and head of AIM, Mr Marcus Stuttard as part of his Septic Seven shares. They have all been Red Flagged on ShareProphets, but continue to trade. Well, all but African Potash (AFPO) which finally had a one-way trip to the AIM Execution Chamber over the weekend after its Nomad finally did the decent thing and resigned.

However, with 23 of the Filthy Forty already departed AIM, and a further two suspended pending accounts (and other matters, in relation to Asian Citrus Holdings, ACHL).

In short, I smell a rat. Perhaps AIM Regulation can get to the bottom of it all and reassure everyone that all is in order and in that vein I have penned another missive.

Dear AIM Regulation,

Thank you for your reply and I trust that you have now taken the matter up.

However, I note that still the company website is down. As stated in recent RNSs, the web address should be:

Surely if the company is unable to fulfil its obligations under AIM Rule 26 after this length of time a suspension is in order?

The reason I became aware of this issue was upon trying to check out the company website with reference to this:

The obvious question as to why the nominee holding had been moved is whether this was to make a sale easier to achieve. We have not had a TR-1, but with no AIM Rule 26 webpage to refer to nothing can be verified at all.

What I would say is that if I were a fraudster looking to offload my holding in a company's shares before the whole charade came crashing down, I would want to get news out into the market that pushes up the share price and then quietly offload my shares without anyone knowing.

As for the news to push up the shares (they more than doubled)....

The above change in nominee holding was completed while the company was conducting an Open Offer, having advised the market at the end of last August that this was in order to fund a share buy-back. On Sept 30 last year, deadline day for the release of Interims to June 2016, the company advised the market that details of the buy-back mechanism would be announced "shortly".

Not only have we heard nothing since on the matter, but the company website subsequently disappeared. The last recorded impression we have traced on the web dates back to October. 

Finally, there are some accounting matters which should raise a number of Red Flags, including an audit qualified opinion, a going concern material uncertainty, related party transactions resulting in overdue receivables and overdue receivables not being written down. They are explained here:, although you will have to access filings at Companies House in order to inspect the company's accounts for FY2015 as they are not available via the non-existent website of the company. The market was promised an update on related party receivables issue, as discussed in the FY15 accounts, but none has been forthcoming.

It goes without saying that I smell a rat.

Over to you....

Please do not wait for the Nomad to resign when it does not get paid. People are buying the shares and they deserve protection.

Finally, you may wish to consider the performance of the Nomad in overseeing what is surely a blatant breach of AIM Rule 26 for a prolonged period.

With kind regards,

Nigel Somerville

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