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Filthy Forty MoneySwap proposes to delist from Casino after eight months of suspension. So much for AIM Rule 41, Marcus Stuttard.

By Nigel Somerville, the Deputy Sheriff of AIM | Friday 14 April 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.

The ShareProphets AIM-China Filthy Forty is set to have yet another casualty – this time MoneySwap (SWAP) which is proposing to follow Taihua (TAIH) and Jiasen (JSI) out of the back door via a cancellation EGM to become the twenty-seventh Casino delisting. But this will be after almost eight months suspended from trading. Oh Oxymorons at AIM Regulation, whatever happened to AIM Rule 41 which says that execution comes at the end of six months’ suspension? Why don’t you just apply your own rules? Does the AIM Rulebook count for nothing these days?

We’ve been here before with the Filthy Forty: in 2015 Global Marketing Group (GMC) spent over a month suspended with no Nomad before Aim Regulation finally pulled the plug (after George Osborne had returned from his China trip). Yet AIM Rule 1 says execution comes after a month with no Nomad. The very first rule in the book doesn’t apply, then.

Then last year in a farcical situation, the Oxymorons refused to give LED Holdings (LED) the order of the boot after six months’ suspension. Heads in sand – apparently because the basis for the suspension had changed (from pending FY accounts to pending interims), even though there is no exception or qualification offered in the relevant part of AIM Rule 41:

The Exchange will cancel the admission of AIM securities where these have been suspended from trading for six months

That’s plain and simple. And if Marcus Stuttard’s finest thought there was a good reason for offering an exception, they were ignoring the qualified opinion offered by LED’s auditor in those accounts, the Going Concern warning. It finally took the simultaneous resignation of the company’s chairman and Nomad to force the issue and after eight months looking utter chumps AIM Regulation finally pulled the plug.

Now you might think that a lesson has been learned there, since New World Oil and Gas (NEW) was given the boot after a six month suspension despite the reason for the suspension having changed.

But no, step forward AIM-listed (for a few more weeks, although in zombie form as it will remain suspended until departure) train-wreck and Filthy Forty poster-boy MoneySwap. It scraped out its six-month overdue FY numbers just ahead of automatic delisting – and interims which had also fallen overdue – but couldn't have the suspension lifted as it turned out that the Depositary Interest facility it had been using to allow electronic settlement through CREST had been cancelled – due to non-payment of fees, in turn due to working capital constraints. Right.

Electronic settlement is also a condition of having an AIM listing and the company was given a stay of execution to give it time to have the facility restored. Why? The rules are the rules!

The company said at the time (21 March) that it expected to get a replacement facility ahead of an EGM planned for 19 April (called to approve a recapitalisation). Then on 29 March we were told that the company had sent in all the necessary paperwork and that:

The Company anticipates that the new DI facility will be in place on or about 10 April 2017. Once a new DI facility has been established, the Board anticipates that trading in the Ordinary Shares on AIM will be restored

10 April came…..and went. No DI facility, no restoration of trading. April 11 and 12 came and went too and still nothing. Then yesterday, after-hours and ahead of the Easter break so as to be sure everybody in the City had gone home – truly a no-one-is-watching o’clock moment – the company announced:

The Board of MoneySwap has concluded…..that the Company's ordinary shares……should not remain admitted to trading on AIM.

And that…

The Company's Ordinary Shares are currently suspended from trading on AIM pending the Company putting in place a depository interest facility.  Whilst the Company has taken the necessary steps to put a new facility in place, as the Company and Wraith have now agreed that the Subscription will not proceed whilst the Ordinary Shares are admitted to trading on AIM, and in light of the proposed Cancellation, the Ordinary Shares will remain suspended due to the uncertainty that prevails until the Subscription is completed.

Right, so having been suspended for almost seven months but got its accounts out and got all the paperwork in to get the Depositary Interest facility restored all of a sudden in the space of a couple of weeks the company has had a Damascene conversion and decided that being on AIM isn’t the way forward after all.

In addition, it seems that White Knight rescuer Wraith, having set a number of conditions for the proposed recapitalisation of MoneySwap which included the company remaining on AIM and retaining its Nomad (Allenby), has also now concluded that coming off AIM and binning the Nomad is fine by it.

You’ll pardon my cynicism.

So here we are into the fourth week after MoneySwap should have been booted off the Casino having been suspended continuously for six months under AIM Rule 41 yet the Oxymorons have sat by and watched this farce continue. Rules of the Casino clearly count for nothing.

And to rub salt in the wound, the company cheerfully tells us that it will hold a delisting EGM “in accordance with AIM Rule 41”. No, fellas: in accordance with AIM Rule 41 the company should have been unceremoniously booted off the Casino three weeks ago. You couldn’t make it up.

Three times with Filthy Forty companies AIM Regulation has decided to flout its own rules and not boot off companies when it should have done. Three times all it has done is leave Marcus Stuttard’s finest looking like chumps. Quite a hat-trick.

What is the point of an AIM rulebook if even the very regulator whose terms of engagement it is ignores it?

Meanwhile, that’ll be delisting number 27 out of our original Filthy Forty, leaving just thirteen plays on the Casino. The embarrassment of the world’s most successful growth market continues unabated.

Will AIM Regulation put itself in the dock for bringing its own market into disrepute?

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