By Lucian Miers | Saturday 18 March 2017
Disclosure: The author has a short position in one or more of the shares mentioned. 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.
As the sordid story of IGas (IGAS) reaches its conclusion with massive destruction of value for its shareholders, let us not forget a deceitful and misleading chain of events, approved by Sarah Hale then at NOMAD Jeffries and completely unpunished by the AIM regulators.
January 16th 2014. Under the heading Director Share Purchase The Company announced.
IGas, one of the leading producers of onshore hydrocarbons in the UK, has received notification that the Chief Executive Officer, Andrew Austin, has purchased 300,000 ordinary shares in the Company ("Ordinary Shares") at a price of 135.38p pence each.
In November 2014 as a direct result of the scrutiny generated by the use of the same deceit by high profile Quindell fraudster Rob Terry, the company stated
The Company notes the recent movement in its share price and confirms the detail contained in the statement on 16 January 2014, in respect of Mr Andrew Austin's facility with Energy First Partners LLP, is full and correct disclosure for the purposes of the AIM and Disclosure and Transparency Rules.
Mr Austin's beneficial interest is 10,971,164 shares.
And then on November 26th
Under the terms of the facility with EFH announced on 16 January 2014, Mr Austin transferred a total of 7.5 million shares to EFH and received the net sum of £7,009,533, equivalent to 93.46p per share transferred under the agreement. Mr Austin both fully intends and is required to repurchase all of these shares at the end of the three year term, by repaying the facility at a cost of £7,899,870 equivalent to 105.33p per share.
Mr Austin's interests remain aligned with those of shareholders and through the arrangement he remains fully financially and economically exposed to the Company's share price.
So Mr. Austin having sold 7.5 million shares for a cash amount that now represents 50% of the entire market cap of the company is “required” to repurchase these shares for £7.9m? And his “interests remain aligned with those of shareholders”
No he isn’t and no they are not. The above statement is false and misleading to the point of criminality.
Piggy Austin was fired in May and walked off into the sunset with £7 million which he has zero obligation to repay with the praise of imbecilic Chairman ringing in his ears
“Commenting on Andrew's departure Chairman, Francis Gugen said: "Andrew and I have worked together since the founding of the Company. He has skilfully led IGas through a series of transformational deals which places the Company at the heart of the shale gas opportunity for Britain. On behalf of the Board, I would like to thank Andrew for his diligent commitment over the years and wish him well for the future."
Sarah Hale then at NOMAD Jefferies, who signed off on the above lies and defended them to me at the time has since departed for Investec which is now the Igas NOMAD. Gugen is still Chairman. As far as I am aware no one has ever been held to account for the falsehoods contained in the above statements.
The regulators, who were given all of this on a plate at the time did nothing. What this saga demonstrates is that companies on AIM together with their NOMADs can issue false and misleading statements and have a great chance of getting away with it.
What’s scary is that had it not been for the firestorm surrounding Terry at Quindell, Austin might still be in charge at Igas.
For what its worth, I remain short of Igas. At the current price the unsecured bond holders get more than 70 cents on the dollar in equity. Given that the debt was trading in the teens, I suspect that, when issued,a tsunami of their stock will be heading for the market.
This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next TWO share tips from Tom & Steve within TWO and a bit weeks and ahead of a new shorting idea from Lucian Miers next week click HERE
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