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By Nigel Somerville, the Deputy Sheriff of AIM | Thursday 11 January 2018
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.
Following my questions about the RNS released last Friday at 4.31pm by AIM-listed Victoria Oil & Gas (VOG) which saw a 20% share price drop during the auction, I have had confirmation of what actually happened from a reliable source. It makes a mockery of AIM Rules and MAR.
On the face of it, the RNS looked appallingly timed. Releasing it at 4.31pm meant that only those with access to the closing auction could react, and not everyone has that. It also looked very poor in terms of releasing it after-hours on a Friday. Thus some will have taken the view that the board of Victoria Oil & Gas are just a bunch of spivs who didn’t give two hoots for their shareholders.
The truth of it was pretty much as I had offered, except it wasn’t really conjecture at all, as it turns out. MAR and AIM rules dictated that the news MUST be released that day. If something like an unexpected (and nothing to do with Victoria) loss of a major supply contract comes in at lunchtime, there is indeed an almighty scramble to get the RNS issued.
It needs board approval, the PR spinners will want to look at it, the Nomad has to sign it off – and then the amended version needs to be seen by the board. I don’t know what time the announcement was submitted into the RNS system, but the awful truth was that the timing worked out terribly.
So this is an issue of AIM Rules and MAR not allowing enough leeway, supposedly to ensure a level playing field. Except that it didn’t – a select few were able to deal in the auction, but many were not, and so the exact opposite of the intention behind the rule of issuing an RNS without delay when reporting a change of trading was in fact achieved. Perhaps this might be something for the regulators to revisit, for in this case surely the correct thing would have been to announce it at 7am on Monday morning.
As for Victoria, one might ask the Nomad if an extra 10 minutes would really have hurt, so as to avoid the auction, but rules are rules and Victoria has been done up like a kipper in this case.
I would comment that the company does say in its RNS that it expects the situation to be resolved in the short to medium term, and reading the RNS again it seems that the problem is down, amongst other things, to Cameroon government tardiness in paying its bills. So we could find a further RNS not long away which says it is all back on. We’ll see.
But the regulators should take a view on whether the strict application of the rules has had the desired effect. I would say it has not – and, very unfairly, Victoria was hung out to dry.
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