UK 03:57 Friday, 6 November 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.


NEW

Exclusive: New World Oil and Gas – the smoking gun

Deputy Sheriff Towers is in receipt of an astonishing document - a Placing Letter sent out by Cornhill Capital pursuant to the abortive fund-raising announced by New World Oil and Gas (NEW) at the end of April. The placing was, of course, conditional on the passing of resolutions at an EGM, which shareholders blocked. But here is the thing: I see absolutely no reference to that requirement in the Placing Letter- indeed, the acceptance form describes the transaction to buy stock ‘Placed Firm’. Who will be first up to the gallows?

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Comments

  1. Any one unsettled or short can now sue for their losses …………….. look out Cornish ……….look out Cornhill ……….roll up ,roll up the no win ,no fee boys will be forming an orderly line.


  2. DUCK AND DIVE

    Might it not be arguable that the proposed placing was at least vaguely flagged up as conditional in the phrase “…subject to the memorandum and articles of association of the Company…”?

    This puts the onus on the HNW/sophisticated individual to read the Articles of Association wherein he would discover that the placing would be conditional upon shareholder approval.

    It’s tenuous – but a drowning Nomad will clutch at straws.

    In any event, the letter states clearly that Cornhill is acting as agent to NEW without having carried out full diligence on the placing so they will be hoping that this gets them off the hook — while hanging the NEW directors and Nomad out to dry.

  3. Wildrides

    Anyone active in NEW that loses money as a result of this debacle will be able to seek redress. That false and mis-leading RNS will have affected everyone.

    The issues of NEW have moved on from AIM regulation and into the countries commercial statues, this issue and the solutions are in the hands of the lawyers now.

    The regulator is not in a legal position to accept a solution which causes users of the markets to become bankrupt or insolvent as a consequence of the dysfunction of the markets, which is why it has insisted that whatever solution is found it must cover all positions.

    Existing shareholders are going to have to compromise on this one, the shares will stay suspended until they do.

    I don’t have any sympathies for the uncovered shorts, I don’t have any sympathies for anyone who wants to trade this catastrophe of a share, or indeed in this part of the markets. It’s bloody hard work and time consuming to even attempt to make money on shares like this one, and even then only a handful succeed.

    America has very little history so it created Hollywood to give them one. Perhaps this summer if people want to go on holiday and take a book to read, take a book that describes of what really happened to those that went to the Klondike to find gold. As they finish the book, I tell you one thing for sure, they will never buy. shares like this one again


  4. drunken sailor

    “Your Placing Participation and commitment under this letter is conditional upon the Placing Agreement and Engagement Letter each becoming unconditional and on the Engagement Letter and/or Placing Agreement not being terminated, as referred to above, and any Placing Shares purchased by you will be purchased for and held subject to the memorandum and articles of association of the Company.”

    I do not think it is the smoking gun you believe it is

    Lots of people want to cancel their trades having bough at silly prices and still not having settled shares. Surely there is a breach of contract by brokers to clients – the fact that the brokers have had contracts they made breached by non delivery of the stock is not the client’s problem. Is there a way to force brokers who have not been able to deliver the stock to their clients to cancel and refund their clients’ money, which the broker duly took on the settlement date? If the shoe was on the other foot ie the shares were delivered but the client did not pay then the broker would have sold the shares again and other shares in the client’s portfolio to make up any shortfall.


  5. nigel somerville

    Wild – I’m not sure it is as simple as that. Certainly as far as Cornhill is concerned, lack of Due Diligence is made plain but I see no explicit reference to the conditionality on the passing of a special resolution at the General Meeting in the document. The position of Beaumont Cornish would appear at first sight to be a different matter, however. The Placing RNS also failed to point out that the deal was conditional on shareholder approval. I suspect that the quoting of the resolution for the GM will be claimed to be enough – although I would suggest that since that was for a far larger issue of shares it was less than entirely clear. As for the BoD that is a different matter: in my little unregulated and unqualified world, the conditionality should absolutely have been made clear in both the placing letter and the RNS. That it was not suggests that Cornhill did not know (and why should they, given the declared lack of DD) and that the BoD should have told them, formally. So many shady blurrings….

    D&D – yes, I suppose so, but being referred to the Articles and Mem gets you nowhere: there is no reference to AGM resolutions (which is where you would find ongoing disapplication of pre-emption rights) or to any EGM resolutions. Thus, I would think that any reasonable person would assume that there was no problem with s/h approvals. As you point out, the implications on the Dirs and Nomad do not read well.

    Phil – redress point seems reasonable, but you must bear in mind just how many lawyers will have been crawling all over this. But I agree completely, in principle. In the light of the placing Letter, I do have some sympathy for anyone who thought they’d taken stock and forward-sold thinking that it was a done deal. They will have ended up in a naked short and I think they will feel that they have been duped into it by lack of disclosure – not helped by the RNS. You may not like this way of operating (I don’t) but it is the way the system works for now. If you piled into a placing on the back of the letter linked and then saw the shares credited to your account, you would surely think it ok to sell them for a profit. I think your comments re the regulator (such as there is one!) are probably correct but more from the point of view of avoiding the embarrassment – always the thinking is to sweep it under the carpet if possible.

    Drunken – you are very much one for details, so I ask this with trepidation! Where does the Placing Letter make it clear that refusal of shareholders to grant approval at an EGM will result in the Placing Agreement or Engagement Letter being terminated? ‘The Placing Shares…will be…held subject to the mem and Article…’ Well yes, but you actually have to refer to AGM resolutions and voting for that. It is a bit of a stretch, don’t you think? For me, this should have been explicit in the Placing Letter and so either Cornhill knew perfectly well or the BoD didn’t tell them when they should have. As for the Nomad, well…. Re unsettled stock – the LSE tried to push that but threw in the towel, and suspended the stock instead.


  6. drunken sailor

    Nigel,

    Details are important. I agree a very clear banner headline on it that said the shares are conditional on approval at EGM and must not be traded until that approval has been given would in hindsight have been a really go idea. however what is does say tucked away amid reams of other dull and largely unintelligible to ordinary people clauses is more than enough to ensure Cornhill are not held liable for the fiasco.

    The question that needs to be answered is how was it possible for shares that had not been admitted to trading – you have to apply for there admission and surely that application can’t be made until the shares are actually legal to issue, get into accounts where they could be traded?

    If I had a load of shares arrive in my account that I had paid 0.055p for and at a click of a button I could get an instant 50% profit, even being a pedantic detail man I would click the button first and maybe wade through the documentation afterwards – the button should not have been clickable preferably not until after formal admission to trading (was supposed to be on 20 May), but definitely not until the application for admission to trading had been approved post EGM.

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