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Filthy Forty Asian Citrus – now interims delayed as Casino eviction draws ever closer

By Nigel Somerville, the Deputy Sheriff of AIM | Saturday 4 March 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 poster-boy Asian Citrus (ACHL) updated the market yesterday that in the light of ongoing allegations of fraud which have thus far prevented release of audited accounts for the year to June 2016, it has now concluded that it won’t get its interims to December out on time either. The shares have been suspended since September 28 last year and now with two sets of numbers outstanding and a deadline under AIM Rules of the 28th of this month to meet or face expulsion from the Casino the fat lady is already humming  a merry tune as she gets the lethal injection ready.

The reason for the suspension was allegations over a mis-match of numbers in the books of suppliers and the company’s subsidiaries, and allegations that (apparent) bank statements did not match other (apparent) bank statements. What, allegations of fraud, I hear you ask? At an AIM-China company? Surely not!

The company has given update after update since the suspension, promising additional audit procedures so that any restatements and clarifications which may be needed can be issued once the investigations are complete. But update after update has also shown that there has been no progress at all in getting these additional checks - which were to include trips to the various banks so that the auditor could see statements first hand – done. Is someone a tad reluctant to allow these checks to take place, I wonder?

Audited FY numbers to June last year were supposed to have been released yonks ago: by calendar 2016 year-end under AIM Rules, but since the company is dual listed (for how much longer?) in Hong Kong, which requires full year numbers within three months, those accounts are now more than five months late and the company seems no nearer to getting them out than it was last September.

The company is obliged to release interims to 2016 calendar year-end within two months of period-end under Hong Kong stock exchange rules, and three months under AIM Rules. Now we are being told that with all that uncertainty over the FY16 accounts the board believes that to release unaudited interims would be misleading and confusing. I should coco.

One wonders whether previous sets of accounts will turn out to have been, ahem, “misleading and confusing.”

Thus far Asian Citrus has offered plague and natural disaster upon plague and natural disaster as the reason that its orange trees failed to produce oranges in quantity, which is why its plantations in Xinfeng and Hepu have ceased operations with hefty associated write-downs and tree removal costs indicated.

Given the allegations over conflicting bank statements and books, one begins to wonder whether all the reported cash and trade was real - as is par for the course with AIM-China frauds. But one also begins to wonder about all that plague and misfortune to befall the plantations. Were they real? Were the trees real?

One thing I do not wonder about, however, is the direction of travel. The only impediment I can see to Asian Citrus becoming the 25th Casino departure from the Filthy Forty at dawn on 29 March is that I believe fellow AIM-China long-termer on Death Row, MoneySwap (SWAP), will slip silently away first – on 22 March, now just two and a half weeks away.

The scandal of the ShareProphets AIM-China Filthy Forty still has some way to go.

But, of course, on the world’s most successful growth market where there is no problem of fraud and which is tightly regulated by the iron fist that is AIM Regulation, there is no possibility that anything is just quietly being swept under the carpet.

Oh no, no, no. Wash my mouth out.

How could I possibly think such a thing? 

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