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AIQ suspended AGAIN: another win for the Deputy Sheriff, a day of shame for the LSE and UKLA

By Nigel Somerville | Monday 23 April 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.


The only surprise is that this didn’t happen sooner. Standard-listed AIQ has been suspended again, under Rule 1510 of the Rules of the London Stock Exchange. Unlike last time, it was not at the request of the company, this is the regulators in action (as opposed to inaction last Friday). It also means that having listed on January 9th this year, the stock has been trading for just 3 days in January and two and a half in April – a total of five and a half days over the course of a day short of fifteen weeks. Is this some kind of record?

Rule 1510 tells us that:

G 1510 The Exchange may prohibit any trade or class of trades from being dealt on Exchange.

 Guidance to Rule:

Examples of a regulatory suspension are:

• a suspension imposed by the competent authority or market operator for the venue

of the relevant market; or

• a suspension for orderly market reasons imposed by the Exchange.

When a security is suspended by the Exchange, the Exchange will delete any orders and

close any quotations present in the trading system in the suspended security.

 

The Exchange may exercise its power to suspend or remove from trading a MiFID

transparent security which no longer complies with the rules unless such a step would be

likely to cause significant damage to the interests of investors or the orderly functioning of the

financial markets.

 

(Amended N09/17 – effective 3 January 2018)

Since the RNS announcing the suspension tells us that:

If you have any queries relating to the above, please contact London Stock Exchange on 0207 797 1000.

...I think we can safely assume it was a suspension for orderly market reasons imposed by the Exchange.

The question is why was this not done on Friday? My article on the matter went up at lunch time, when I asked Is there once again a huge queue of unsettled trades building up? and went on that As an advert for the Standard List, the UKLA and the LSE should be ashamed of themselves. Is it not crystal clear that something is not right?

Well, it appears that I was right on both counts. Why, sitting at my dining room table without a team of regulators to consult, did I realise that on Friday and the Exchange did not?

Indeed, just to rub the salt in, I also said (regarding Tom Winnifrith’s quick sale of his windfall shares) that:  he may be ruing acting so quickly for he could have more than doubled his money if he had held on. But cash in the bank is cash in the bank. Cash in the bank: again, bang on the money.

One has to wonder at the competence of AIQ’s directors. The know-of-no-reason RNS which appeared within an hour of my piece told us that:

AIQ Limited (LSE: AIQ)….. notes the recent significant increase in the Company's share price and confirms that it is not aware of any reason for such movements.

That RNS was signed off by Chairman Graham Duncan. Well, Mr Duncan, today’s suspension casts your statement in a rather unenviable light, does it not? Did anyone at the company check what was going on or did they all look the other way? Again, why was I bang on the money sitting at my dining table with no office support or advisers to call, yet the company simply got it wholly wrong? Was it not completely obvious that there was a disorderly market?

One has to say that it is difficult to imagine any credibility remaining in the AIQ boardroom after that. Who would believe a word they have to say now?

So do we now have to sit around for another three and a half months whilst the company scratches around to sell a few more shares and claim the disorderly market has been dealt with? Would the UKLA and the LSE buy that, once bitten and all that? Who would bet that it would work if it has not worked the first time?

Will the LSE and UKLA man up properly and throw AIQ off the market altogether? Or will they look for the easiest solution (printing more shares) in oder to dust the matter neatly under the carpet?

And what happens to those who bought shares at 150p today? Will they get their money back?

How on earth did this company get past the UKLA in the first place? The IPO shares were issued on paper and the recipients got them after the stock had listed – and then had to dematerialise them. And someone was surprised that there was a disorderly market? What on earth did anyone expect?

And let us not forget that the listing paperwork missed out a few important details in the directors’ CVs. And, of course, there was plenty of evidence linking AIQ to dodgy schemes in Malaysia and China which was only taken down after my pieces HERE and HERE were published, and denied. I accepted the denials, but why were the links taken down so late on?

This whole exercise had been an absolute joke. It makes a mockery of the Official List of the London Stock Exchange – it even makes AIM look well regulated, which really is quite an achievement.

Hang your heads in shame, the bloody lot of you.


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