UK 21:43 Monday, 21 September 2026
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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 New World Oil and Gas (NEW) saga is something that I’ve avoided making too much comment on, but now find myself in possession of information pertinent to it. Below I provide a copy of a letter that has been sent to me, which was sent from Cornhill Capital to its clients about the losses they suffered as a result of forward selling New World's unconfirmed placement.
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Comments
DUCK AND DIVE
Thanks for this insight, Gary. It will be interesting to find out what Cornhill are proposing to individual clients by way of “resolution”. Presumably, they won’t all be getting the same form of “resolution” or this could have been included in the letter.
I don’t have any ill-feeling towards individuals who forward sold. But I feel they should shoulder some of the blame for the cock-up. The first thing I did on hearing about the placing was to check the NEW Articles of Association, wherein it is bleedin’ obvious that an EGM would be needed to issue the new shares. That many of the traders apparently didn’t check up doesn’t say much for their expertise.
The real culprits though are the directors, the broker and the nomad, all of whom can no longer be trusted to do conscientious work. This Cornhill letter is disingenuous for it is their lack of diligence and oversight which allowed their clients to dive in and lose money.
It is shocking that the letter doesn’t include a clear explanation and apology. No doubt Cornhill didn’t want to leave themselves open to a class action — but I think that risk has already been exposed so an apology would have been in order.
wildrides
Seems like a straight forward admission of guilt to me . Doors wide open for compo folks .
GheeBhee
Looks like a spoof to me. Read that last (one line) para again carefully and ask yourself if it even makes sense. Then try it with “If you” instead of “Cornhill Capital”. And if that doesn’t convince you have a look back at the “Smoking Gun” article and the placing letter it revealed. They went to some trouble to say that placees were most certainly not, for the purpose of this placing anyway, clients of Cornhill Capital but clients of the Company. I don’t think MR Frangos would undermine that stance with a letter beginning “Dear Client” do you?
Gary Newman
Duck and Dive,
Pretty much what i did as many companies have limits of 10-15% dilution in any year period without seeking shareholder authorisation by way of an AGM! I suppose you could argue though that if you’re paying for a broker service then that includes some sort of advisory aspect to it as well (not that familiar with it though as i do all my trading through an online account rather than directly with a broker!).
I think that is about as close as you are going to get to any sort of admission and seemed to be cleverly worded and not actually taking any sort of blame as such.
One aspect I have found interesting is how much animosity there has been towards anyone who forward sold, yet most don’t seem that bothered that some (including MTR) cashed in at a time when many PIs were buying in at crazy levels – they seemed so intent to burn shorters that they seemed not to notice they were in significant danger of being burnt themselves at those sort of prices!
I still think it was crazy that it was allowed to play out and should have been suspended immediately it became clear that the market was disorderly. Just my view of course though – no fan of flipping but it is the practice and rules i don’t like, not those individuals that partake in that, as people will always take advantage if the rules allow them to.
GheeBhee,
As far as I have been able to ascertain it is genuine and haven’t heard anything to the contrary thus far – as i mentioned i tried contacting Cornhill but was told Frangos was unavailable. Just thought it was too interesting to sit on given how much attention NEW has had (I’ve largely stayed out of it all).
J P Spaghetti
Frango, of course, means chicken in Portuguese – as in frango y arroz com legumes. Very yummy. Just saying.
Anyway, with a background in derivatives trading (as it seems he has) he really should have known better…