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.

African Minerals; shareholders lose everything, AIM’s flaws brutally exposed

By Ben Turney

4 March 2015 02:19

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If ever a case were needed for reform of the Alternative Investment Market then surely the disgraceful downfall of African Minerals (AMI) provides it in spades. Some might argue that the collapse of the iron ore price is behind the total destruction of over £2billion’s worth of shareholder value, but the reality is this merely provided the backdrop as I now reveal.

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Comments

wildrides

4 March 2015, 02:58

I think Timis is stuffed …………..cant see the Chinese letting him play with their new train set . Personally I will be glad ………….. its Karma if it does play out that way . Timis behaved like a slimy snake oil salesman when he should have been acting in best interest of the share holders as executive chairman ( yes executive! ) . It must set some kind of record for conflict of interest in terms of monitory value destruction . You cant take the Chinese for mugs like that and get away with it ……..he should watch the news more because he should have known that . Cripes ,they will send a “contractor” half way around the world just to “deal” with a small time , two bit “street dealer” . What makes Timis think they are going to be stiffed on the international business stage and sit back lapping it up . You muppet Timis . Sleep well Timis ……..dont have nightmares .
DUCK AND DIVE

4 March 2015, 06:50

This is a woeful tale and my sympathies go out to the PIs who have been used as cannon fodder. This does indeed look like a well-planned asset snatch by the infamous asset snatching dragons of the Orient. We have seen it many times before and some of us wouldn’t touch any AIM stock which has a significant Chinese shareholder.

But the chances of proving any wrongdoing are somewhere between slim and none. AMI has been consuming working capital at an alarming rate and Shandong have seemingly been willing to throw large sums of cash into the voracious black hole – defying logic unless they were using the advances to leverage a planned asset snatch.

Nor would it surprise me if Timis’s earlier acquisition of the Marampa mine was part of the masterplan worked out between him and the Chinese (who may have covertly helped him to finance the acquisition). The chances must be high that the Chinese will also get their talons on Marampa, at a price agreed long ago with Timis.

The key to this plan was not allowing AMI to fall into the hands of the receivers which would have meant waving goodbye not only to the cash that the Chinese shovelled in but also possibly to the assets which would have been sold off to the highest bidder in the fire sale.