By Nigel Somerville, the Deputy Sheriff of AIM | Wednesday 15 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 play Asian Citrus (ACHL) has offered yet another update on its delayed (due to allegations which looks like accusations of fraud) FY16 results. Having tried ever so hard to obtain relevant information and to facilitate additional audit procedures (ie visits to the banks in person) the company has announced that it has initiated legal proceedings to remove relevant senior management members of the relevant subsidiaries. With the shares having been suspended since 28 September execution after six months as long-termers on AIM’s Death Row is scheduled for 29 March. The company cheerfully tells us that the implementation of such changes may take time – ShareProphets RNS Translation Service: it’s delisting ahoy.
The allegations as originally outlines back in September related to allegations of the books not matching those of the group’s suppliers and, ahem, “alternative” bank statements.
Needless to say the auditors were keen to get to the bottom of the matter before signing off on Asian Citrus’ accounts for the year to June 2016, and we were originally told that additional audit procedures – including visits to each bank branch holding company account – had been ordered.
But since then it appears that no progress has been made – in almost six months. Why might the auditor be having a spot of bother accessing original bank records direct from the branches concerned? Surely whoever holds the “chops” would be keen to have the matter resolved quickly as there is nothing to hide?
As to the mis-matches in the books, well there is little to go on other than that we are being told that the Company has not been successful in obtaining all required information.
Has it been successful in obtaining any required information?
Has the auditor managed to get in to see any in-branch bank statements in all that time?
We are told that:
In light of the above, the Company is considering its options and has initiated formal legal procedures to change the relevant senior management members of the relevant subsidiaries. The implementation of such changes may take time should there be resistance from the personnel concerned (for example, if legal proceedings ensue as a result).
Now is that proceedings against the two fine chaps named as making the allegations, Mr Man and Mr DQ Chen? Or is it against anyone not being wholly helpful in getting the allegations investigated and cleared up? It is not made clear.
Well, whatever, having had five and a half months to get to the bottom of all this and seemingly having made little or no progress in that time, the company now has just days to get audited numbers for FY16 released or it is goodnight Vienna at dawn on 29th March (two weeks today).
With the company flagging possible “resistance” from personnel it seems to be trying to oust, it is very hard to see full audited accounts coming out in that time, is it not?
And so Filthy Forty departure number 25 looks to have its exit berth well and truly reserved.
The only question seems to be whether fellow Filthy Forty – and AIM Death Row long-termer for failing to release accounts – MoneySwap (SWAP) bumps it into 26th position, for MoneySwap is a week further down the line.
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