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Servision – more on that grant of security over c. 10m shares

By Nigel Somerville, the Deputy Sheriff of AIM | Saturday 25 February 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.

Yesterday we asked a series of question relating to AIM-listed Servision and its dealings with an obscure American entity called Cascade which has nothing to do with Bill Gates, when it emerged that it seems that the personal guarantee offered to Cascade by Servision Chairman and CEO (corporate governance Red Flag) Mr Gidon Tahan looks to be taking the form of a grant of security over about 10 million of his shares. Did the grant of security involve Cascade being able to dump said shares on the market? But two other details catch my eye.

The “Director/PMDR Shareholding” RNS yesterday details how Mr Tahan gave A personal guarantee by Gidon Tahan for which security over 9,857,881 Ordinary Shares has been granted to Cascade SVP, LLC should the Company default on the terms of a subscription with Cascade SVP, LLC

The RNS starts with Further to the announcement released on 22 February 2017….

The thing is that the RNS of 22 Feb (Wednesday) tells us that Gidon Tahan, Chairman and CEO of SerVision, is providing a personal guarantee to Cascade to cover the issue of the Subscription Shares

My gripe with that statement is that you might think that there was some kind of cash-backing to that guarantee. It seems from yesterday’s RNS that this is not the case at all, and one is left wondering whether this grant of security (over Mr Tahan’s entire holding of Servision shares, according to the company website) has in fact involved the transfer of title to Cascade and left Cascade free to sell all his shares.

As discussed yesterday, that might be considered to offer quite a contribution to the cost of Cascade’s “investment” into Servision shares at more than 400% of the closing price the day before the involvement of Cascade was announced – especially if one considers the timing of Cascade’s first tranche of $1 million of cash which was to be transferred in five business days, according to Wednesday’s RNS. If Cascade was selling the security shares into Wednesday’s monster rally, that’s just nice timing for settlement…..

Despite being pressed for a statement, nothing has yet been forthcoming from Servision’s Nomad, Allenby. Make of that what you will.

And this other detail? The RNS yesterday gives the date of the transaction, the grant of the security, as being on 21 February – last Tuesday.

So to add to all the other questions about whether Mr Tahan retains title and voting rights, or whether Cascade was simply free to dump the shares on the market at will one wonders why the delay in notifying the market of this grant of security.

Why was this not included in the RNS of Wednesday? Indeed, why was it not notified on Tuesday?

Why did it take until after-hours on Thursday for it to be slipped out when no-one was watching?

No doubt Nomad Allenby is looking into all the matters raised with its usual impeccable diligence and will be keen to satisfy itself (and, in due course the market) that all is well.

I am sure that Allenby will want to ensure that the market is told that the shares in question were not sold into the rally of Wednesday, sparked by the news of the Cascade subscription for new shares at over 400% or the previously prevailing share price.

Of course, there is no possibility that there could be even the slightest smell of insider dealing here at all and Allenby will want to ensure that full details of all these dealings between Servision, Cascade and Mr Tahan are made public so that we can all see why the whole package is such a marvellous endorsement of Servision.

This is the world’s most successful growth market, after all, where there is no problem of fraud according to the former LSE chairman at its 2015 AGM under questioning from Lucian Miers.

Over to the fine fellows at Allenby to give the market some clarity on what has actually been going on.

Let us hope that the resulting missive is not to be delivered by Mr Godot.

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