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BNN Technology – another China disaster: shares suspended as are CEO and COO, CFO walks

By Nigel Somerville, the Deputy Sheriff of AIM | Monday 4 September 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.


Lucian Miers can be heard singing in the bath this morning as shares in BNN Technology (BNN) have been suspended. In the last year alone the shares have dived from over 160p per share to the suspension price of 41p, at which its market capitalisation was still a whopping £94 million. Do the maths, at peak price that’s something like £360 million.

This morning we are told that the CFO, Mr Scott Kennedy, tendered his resignation late on Friday, making a number of serious allegations with regards to the Company and the actions of Mr Darren Mercer, the Chief Executive Officer and Mr Wei Qi, China CEO and Group Chief Operating Officer.

Messers Mercer and Qi have been suspended with immediate effect on the advice of the company’s legal advisers and AIM Nomad, Strand Hanson – which leaves a bit of a problem because there are now no executive directors or senior executive management to provide oversight and control of the company’s operations, particularly in China. Consequently, the company (what’s left of it) has requested an immediate suspension in the trading of its shares.

The Nomad appears to have called the shots, agreeing with an independent committee made up of two NEDs (including the chairman) of Harry Keiley and Lord Mancroft not to resign for the time being, and a full review under a scope set under advice from the company’s auditors, Nomad and legal advisers is being commissioned.

This may all come as a bit of a shock – except for ShareProphets readers who have been warned repeatedly by Lucian Miers about this company (see HERE). Not only was he short, he highlighted an alarming array of Red Flags in the last five months. Quite apart from where all the money has gone and the jam-tomorrow we’ll be profitable soon comments – something which has always failed to come to pass even as recently as the April placing of £25 million, we also see his comments of the full year accounts which highlighted a £2.2 million “other investment” which was not to be found in the RNS version of the prelims. Lucian commented at the time:

So the company spent £2.2 million last year on an investment in a mysterious entity and doesn’t know what happened to that money or the value of what it was spent on? It doesn’t look good to me and I would welcome an explanation from any well-informed shareholder.

Hmm.

The placing in April – conducted by poor Phorm (PHRM) broker Mirabaud, a company sharing the Nomad services of Stand Hanson – raised £25 million at 80p (as against the suspension at 41p) and Lucian kept asking where all the money was going. I daresay investors may be keener than ever to find that out too.

One might want to have Nomad Stand Hanson strung up for this, but so far it has acted properly. With “serious accusations”, rather than resign and wash its hands of the whole affair – or worse, just ignoring it all as per FinnCap and Telit (TCM), it is sticking around. Of course, we may still end up with a resignation but one might hope that instead we get a full account of what has been going on.

But for now, for the former DJI Holdings (DJI), now BNN Technology, it sounds worryingly like a very large helping of toast is on the way.


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