By Tom Winnifrith, The Sheriff of AIM | Friday 22 May 2020
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.
Those who read my From Athens with Love dossier on InternetQ (INTQ) in 2015 when it was AIM listed will have been in no doubt that its users and sales were pure fiction. Today there is final vindication for me, this is yet another massive fraud from Greece.
Assisted by Martin Hughes of Tosca Fund, InternetQ evaded my probes by de-listing, it then – as Akazoo – relisted on Nasdaq raising vast amounts of new cash. Unfortunately for it, on 20 April this year, my pal Gabriel Grego published a new dossier exposing the fraud. Today a final fess up.
We are told that new NEDs have concluded that the bubbles who ran this show and been very naughty indeed “materially misrepresenting Akazoo's business, operations, and financial results as part of a multi-year fraud.”
The statement is a hoot:
“In particular, the Special Committee has determined, among other things, that (i) Akazoo's historical financial statements, which have been audited by multiple, experienced global accounting firms for years, were materially false and misleading; (ii) Akazoo, in fact, has had only negligible actual revenue and subscribers for years; and (iii) former members of Akazoo management and associates participated in a sophisticated scheme to falsify Akazoo's books and records, including due diligence materials provided to MMAC and its legal, financial, and other advisors in connection with the Akazoo business combination in 2019.”
This looks rather bad for ex CEO Apostolos N. Zervos who was fired on May 1 but also for Hughes and his Tosser Fund. He was the architect of the take private move on AIM, was heavily involved in the Nasdaq listing and Tosser remains a major shareholder.
We are told that the Company intends to take all available steps to maximize recovery for defrauded investors, including by seeking to unwind the original business combination between MMAC and Akazoo. The Special Committee has also directed its advisors to make referrals to, and cooperate with, appropriate regulators. The shares will be chucked off Nadaq on May 27.
I do hope that the regulators contacted include the FCA in connection with the original InternetQ fraud and that Martin Hughes is asked to explain his precise involvement in this major scandal.
Meanwhile its ouzo time for the Sheriff of AIM. No doubt Roger Lawson & ShareSoc will again view my work back in 2015 as that of a “troublemaker” and call for more regulation of folks like me. If only I had given InternetQ a chance to comment before doorstepping it in Greece and publishing a series of exposes how much better the world would have been.