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Exclusive: AIM Kills ZAI as a Nomad - the full story the LSE is desperate you do not hear

By Tom Winnifrith, The Sheriff of AIM | Wednesday 11 October 2017


 


At 5.45 PM yesterday Denzil Jenkins of the AIM Regulation team called Nomad ZAI. No-one answered so he left a message on its answerphone informing the Nomad that it was to lose its Nomad status at 6 PM that day and that its clients would be contracted at that time with the news. Jenkins followed this up with an email saying that ZAI could appeal but when you are going to lose all your clients what is the point? In fact the events of yesterday are just part of a story which shows AIM in a terrible light as a secretive and oppressive body covering its own failings with scapegoating and showing no regard for natural justice or any sense of fairness.

AIM cited Rule 2 for removing ZAI's license, that is to say that a NOMAD must

· have acted on at least three Relevant Transactions during that two-year period;
· employ at least four Qualified Executives and in this regard the Exchange will take in to account the overall experience of the Qualified Executives on an individual basis and as a team.

To the latter first. One of the 4 QE's that ZAI employs is set to go in for a hip replacement operation. He will be out of action for a couple of weeks. He will still be on his blackberry. Never in the history of AIM has a QE having to go into hospital for an operation counted against the QE quota. This is a novel precedent.

As to the failure to to three qualifying transactions does really want Nomads doing deals for deals sake? Perhaps more pertinently ZAI is not the only Nomad failing this test but it has been the only one struck off. Why?

Rewind to early this year when ZAI was served with a notice to appear before the AIM Disciplinary Committee on four counts. Since this case is technically still live I cannot discuss the counts in full as I volunteered to act ( unpaid) as an expert witness for ZAI. I dco not regard this firm as Angelic. far from it. But there are far worse and the actions of AIM had all the hallmarks of a witch-hunt. The four charges were pretty thin gruel compared to the Nomad allowed scandals we expose on this web site every day.

To give you a flavour, one charge was that ZAI failed to stop a chap being proposed as a director when he stood accused of wrongdoing. To be fair he denied the minor charges and had just been appointed as a director of an ASX listed firm after getting full clearance. He was subsequently vindicated. AIM's expert witness was Stuart Andrews of FinnCap which in August this year took on as a client the Israeli fraud Telit (TCM) only to have it revealed here a few days later that Telit's CEO was a fugitive from US justice and a mortgage fraudster. As an expert witness AIM tasked Andrews to opine on director dsue diligence and client take on procedures. You could not make this stuff up.
And so it went on.

Incidentally ZAI called me as an expert witness to the tribunal as an expert on AIM fraud. The tribunal sees AIM Regulation act as Judge, Jury and the Prosecution and initially AIM Regulation said I was not qualified to opine on AIM fraud. As ZAI's lawyers rattled off the very long list of AIM frauds I had exposed my expertise was accepted.

A date was arranged in the Spring for the hearing and as I was in Greece AIM gave an exact date for me to appear so that I could fly in for just 24 hours. I made it clear that I would appear but we had to fix a date well in advance as there are limited flights out of my local airport in Kalamata and I was loathe to trek up to Athens to fly. It was agreed by all parties. A week before the tribunal AIM got in touch to change my dates and asked if in light of that I was still appearing. To its grave disappointment I said I'd still appear but at this juncture it was clearly a rigged court.

ZAI knew that and asked if the hearing could be in public as the rules indicate it could be. AIM declined. What was it so keen to hide? ZAI appealed to the High Court seeking that the tribunal be held in public and sadly it lost. At that point while ZAI's costs were £60,000 The LSE said that its costs were well over £500,000 and sought and obtained a costs order against ZAI.

ZAI has outstanding liabilities (£150,000 to HMRC) but also has assets that could cover that but not - without a capital injection - the costs order as well and so a few weeks ago AIM forced it to write to clients saying that it was in financial trouble. It was not allowed to say why. It was also blocked from acting on any new transactions or fund raises.
ZAI has been offered money to refinance but three times it went to AIM proposing a financial settlement of the costs order and of the charges against it. Three times AIM rejected its offer but knowing that the ADC process could drag on for months and might still find its way into the press it appears that AIM Regulation has found another way to kill ZAI.

AIM will no doubt say that it has rid the market of an errant Nomad as it cleans up the Casino. ZAI was clearly not the best Nomad in town but it was not the worst. Its boss Big Ray Zimmerman is a big fat American who speaks his mind and has the nervous energy of tigger. He is not part of the City establishment like Roland "fatty" Cornish the Oxford educated boss of Beaumont Cornish whose war crimes against AIM make those of ZAI like speeding fines. The folks round at Allenby were signing off on lies just last week ( Conroy) and are quite happy to act for frauds like Camkids even when the evidence stares them in the face. But they aren't bumptious Americans who call a spade a spade.

I'm all for cleaning up AIM but shutting one small Nomad with less than a dozen clients is not going to persuade me, or anyone else, that AIM Regulation is up to the job. My real sadness is the tribunal for ZAI will almost certainly not now go ahead and we will not discover what it is that AIM is so keen to hide, nor we will have the fun of Mr Andrews having to discuss the high standards of client take on procedures that AIM can expect in relation to his own failings with regard to the Telit fraud.


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