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For the Record Nomad Cenkos asked to investigate if its client Mercantile Ports & Logistics has committed fraud

By Tom Winnifrith, The Sheriff of AIM | Wednesday 21 June 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.

There is clear evidence that Mercantile Ports & Logistics (MPL) has misled investors ahead of raising vast amounts of cash on the AIM Casino. Its Nomad Cenkos Securities (of Quindell infamy) appears unconcerned as long as it keeps banking the fees. When this company unravels and goes to zero as it surely will, the shameful way that Lagos Securities has brought the casino into disrepute by ignoring stacks of red flags shown to it, will surely leave it in the merde. A shareholder who happens to be a ports industry specialist has written to Cenkos’s representative for Governance matters Amber Wood (ccing in PR specialist Redleaf which also acted for the Quindell fraud). The damning letter is below. It is truly shocking...

Dear Ms Wood.

The Serious Fraud Office has charged Barclays, its former chief executive and three other former top executives with conspiracy to commit fraud.

The SFO charged former Barclays chief executive John Varley and three former colleagues – Roger Jenkins, Thomas Kalaris and Richard Boath - with conspiracy to commit fraud by false representation in relation to a fundraising that took place in October 2008.

Fraud by False Representation

Section 2 of the Fraud Act 206 makes it an offence to commit fraud by false representation.
The representation must be made dishonestly. The current definition of dishonesty was established in R v Ghosh [1982] Q.B.1053. That judgment sets a two-stage test. The first question is whether a defendant’s behaviour would be regarded as dishonest by the ordinary standards of reasonable and honest people. If answered positively, the second question is whether the defendant was aware that his conduct was dishonest and would be regarded as dishonest by reasonable and honest people.

The person must make the representation with the intention of making a gain or causing loss or risk of loss to another. The gain or loss does not actually have to take place.

A representation is defined as false if it is untrue or misleading and the person making it knows that it is, or might be, untrue or misleading.

A false representation may be express or implied. It can be stated in words or communicated by conduct.
There is no limitation on the way in which the representation must be expressed. So it could be written or spoken or posted on a website.

Now consider the following:

A claim in the MPL Shareholders Circular dated 31 October 2016, to raise £37m, that on-site construction work had been progressing uninterrupted since October 2015, and that the Market should expect a further 65 acres of Land Reclamation by end of Jan 2017 and 105 acres by end of Q1/2017; WHEN THE MARKET SUBSEQUENTLY FOUND OUT THE COMPANY WAS NOT CARRYING OUT AND, HAD KNOWINGLY PLANNED NOT TO CARRY OUT ANY LAND RECLAMATION WORK WHATSOEVER, DURING THE ENTIRE 6 MONTH PERIOD - JUNE 2016 TO DEC 2016.

From what the Market has been able to establish from subsequent written and photographic evidence provided by the Company - other than some minor land development work, MPL shut down nearly all construction work at Karanja during H2/2016, despite telling the market in the June 2016 Prelims Update and October 2106 Shareholders Circular, they expected to achieve Land Reclamation and Berth Piling Progress Targets by end of Jan 2017, Q1/2017 and H1/2017, that were multiples of the progress rate previously achieved when they were ACTUALLY CARRYING OUT LAND RECLAMATION AND BERTH PILING!

MPL Website:

'About Us'
MPL's maiden project is the development of a world class multipurpose terminal and logistics facility at Karanja Creek.

The Terminal will be comprised of:

A 1,000m Quay, which will be serviced by a combination of ship to shore and multipurpose cranes. (It has since been downgrade to a low cost 300m to 400m open jetty)

ACCORDING TO LEGAL ADVICE - The two stage test for False Representation is:

Q1 - Would MPL's behaviour be regarded as dishonest by the ordinary standards of reasonable and honest people?

If yes,

Q2 - Was MPL aware their conduct was dishonest and would be regarded as dishonest by reasonable and honest people?

Now lets consider the MPL Shareholders Circular dated 31st October 2016 and the Company Website:
Do you think the AIM Regulator and SFO will need 9 years to work out that the Company's executive management, aided and abetted(wittingly or unwittingly) by its Neds, Nomad and Communications agency, may have a case to answer with regarding to it constituting a conspiracy to commit Fraud?

Kind regards,

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