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China fraud Aquatic Foods – still can’t get the cash out of China, no results = SUSPENDED

By Nigel Somerville, the Deputy Sheriff of AIM | Thursday 29 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.

Well there’s a thing: ShareProphets AIM-China Filthy Forty stock Aquatic Foods Group (AFG) is still having trouble remitting funds from China resulting in the delay of payments to a number of parties whose assistance is required for the finalisation of the audited accounts. In short, the company can’t pay its bills and the shares have been suspended.

We are told that the board is putting short term measures in place via director loans to the parent company but it is still expected that the Directors and the Nomad (SP Angel) will still be owed fees.  Oh dear, oh dear.

We are told that attempts are being made to put in place a framework to remit payments in a timely manner despite more stringent cross border controls in the PRC which the board understands to have been more prevalent of late. Well yes, but this is since March (see HERE) and apparently three months later there has been no progress.

And of course there is the dividend, which the company says has been suspended going forward (including the final dividend for last year) until the transfer of funds from the PRC has been resolved.

Now it could be that all is well and this is just a technical hiccup. Or it could be that the wheels are coming off. As a small matter, even the interim dividend for last year was delayed. If you thought that was a one-off before today, you might want to think again.

If I were a non-exec director of a company in this position, would I be offering my own money to patch up things to get a sign off on the accounts when my own fees were delayed? I guess we will find out who’s paid the bills in due course.

In the meantime, with Nomad fees still expected to be delayed as well as Director fees the big question seems to me to be how long the Nomad is prepared to wait before resigning.

Apparently the results will be out next month and are in line with the last trading update. In other words, piles of cash (some five times the market capitalisation at the last count) sitting in China. Great news, but a bit pointless if it can’t be accessed!

How much longer can the company keep going? With the Nomad fees outstanding, not long I fancy

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