Who is Regulating Sirius Petroleum?

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Over the last 10 years, four different companies have acted as a nominee advisor, also known as aย nomad, for Siriusย Petroleum.

A nomad is a private company which carries out due diligence on a company that wants to list on AIM. A companyโ€™s nomad is then responsible for the oversight and guidance of the company throughout itsย listing.

Each nomad is also paid by the company it regulates and sometimes acts as its broker advising it on the price of shares and investment opportunities. This means nomads can have a vested interest in the company they advise doing well on AIM.

This creates grounds for conflicts ofย interest.

There are currently 31 nomads operating on AIM, carrying out due diligence for nearly 950 listedย companies.


FIND OUT MORE ABOUT AIM HEREย 


Evidence shows the four companies that advised Sirius on AIM:

  • Had ties with the companyโ€™s board ofย directors;
  • Were acting as Siriusโ€™ broker,ย creating a conflict ofย interest
  • Have a history of advising companies which delisted from AIM amidst allegations of corporateย wrongdoing.

Here is a run-down of Siriusโ€™ย nomads:

Canaccord Adams,ย now known as Canaccord Genuity, was Siriusโ€™ nomad between 2008 and March 2010. During this time, several board members who previously worked at Canaccord joinedย Sirius.

Toby Hayward, a chartered accountant and investment banker, was appointed to Siriusโ€™ board of director after previously being in charge of Canaccordโ€™s oil and gasย portfolio.

Jack Pryde, a former vice president of corporate finance at Canaccord also joined Sirius Petroleum in 2010. He remains the companyโ€™s non-executive chairman today.

Despite repeated requests, Canaccord did not respond to DeSmog UKโ€™s request forย comments.

Strand Hanson acted as Siriusโ€™ nomad between March 2010 and Februaryย 2013.

Simon Raggett is the chief executive of Strand Hanson, an advisory boutique based in Mayfair, which focuses on mining and natural resources companies operating in emerging market and listed on AIM.

In a 2011 interview, Raggett told The Telegraph:

โ€œWith the markets we operate in, unashamedly it’s never going to be a straight line upwards. There are always going to be regulatory or political issues. Unfortunately there isn’t much oil in Kensington, apart from in the big sportsย cars.โ€

At the time, Strand Hanson had made a deal with Russian investment firm Renaissance Capital, which operates in Lagos through its Nigerianย subsidiary.

For a short time, Renaissance Capital acted as a broker forย Sirius.

Meanwhile, former Renaissance Capital director Ed Johnson joined Sirius as chief executive. Johnson was also former head of oil and gas at Siriusโ€™ previous nomadย Canaccord.

Strand Hanson also acted as a nomad for a string of AIM-listed companies accused of fraud andย corruption.

The group acted as a nomad for Sibir Energy before the Financial Services Authority fined the companyโ€™s chief executive ยฃ350 for โ€œengaging in market abuseโ€ including over secret loans to a Russian business tycoon.

It then advised Madagascar Oil, which had its shares suspended off AIM three weeks after its listing over fears the Malagasy government would seize the companyโ€™sย asset.

Strand Hanson also advised billionaire Frank Timisโ€™ company Regalย Petroleum.

In 2009, Regal was fined a record ยฃ600,000 by AIMโ€™s disciplinary committee for failing to ensure the information it notified to investors โ€œwas not misleading, false or deceptiveโ€ after the company claimed it had found close to a billion barrels of oil in a Greek oil well which turned out not to be commerciallyย viable.

In a statement, Regal Petroleum said it was pleased to put this โ€œhistoric episodeโ€ behind it, adding there was no suggestion that its management team โ€œconducted their responsibilities in anything other than a proper and professionalย manner.โ€

Strand Hanson was also a nomad for Gulf Keystone Petroleum, a company owned through a controversial string of trusts by Todd Kozel who was embroiled in a scandal over allegations the company took clients to strip clubs.

Strand Hanson declined to respond to DeSmog UKโ€™s request for comment but a spokesman added the company โ€œabides by all relevant law and regulation at allย timesโ€.

Cairn Financial Advisers acted as Siriusโ€™ nomad between February 2013 and Septemberย 2016.

During that time, Cairn Financial Advisers was also advising CloudTag, a data company operating in the health and fitness sector and another of Corvus Capitalโ€™s ventures โ€” Sirius Petroleim’s keyย backer.

Last year, CloudTag delisted from AIM after Cairn Financial Adviser resigned from its nomad role. The company was unable to find the replacement advisor necessary to re-list on AIM and wasย privatised.

Despite repeated requests, Cairn Financial Advisers did not respond to DeSmog UKโ€™s request forย comments.

Cantor Fitzgerald has served as Siriusโ€™ nomad since Septemberย 2016.

The company has advised a number of companies which were booted out of AIM or went bust following allegations of malpractice andย fraud.

Cantor Fitzgerald acted as the nomad for African Potash, a company backed by former cricketer Phil Edmonds and Andrew Groves which mines and produces fertilisers and whose former director, Christopher Cleverly, ย served as a non-executive director for Siriusย Petroleum.

In 2016, Cantor Fitzgerald resigned from its role and African Potash was delisted from AIM.

The same year, Cantor Fitzgerald also resigned from advising Sable Mining after its chief executive Andrew Groves was indicted for corruption and bribery in Liberia. In a statement, Groves recently claimed โ€œall charges have been irrevocably dropped by the Liberian authoritiesโ€ and โ€œstrongly refutes any allegation that they [he and Sable Mining] had acted unlawfully in relation to Sableโ€™s business affairs in Liberia or indeedย elsewhereโ€.

But the man heading the prosecuting team in Liberia, Fonati Koffa, told Global Witness this was a โ€œblatant and utter lieโ€, adding โ€œno comprehensive investigation I am aware of exonerated theseย peopleโ€.

The allegations of wrongdoing were first uncovered by Global Witness in a major investigation into the activities of Groves and Edmonds through AIM-listedย companies.

Groves and Edmonds also listed mining firm Camec on AIM. Investigation by NGOs Global Witness and Rights and Accountability in Development (Raid) have exposed the companyโ€™s malpractice in Zimbabwe, where Camec lent $100 million to Robert Mugabeโ€™s regime, and in war-torn Democratic Republic of Congo where it reportedly acquired assets from โ€œdubious provenanceโ€.

In 2009, Edmonds and Groves sold Camec to FTSE 100 Eurasian Natural Resource Corporation (ENRC) for over half a billionย pounds.

Two years later, Camecโ€™s nomad Seymour Pierce was fined by the London Stock Exchange for failing to โ€œundertake adequate due diligence and to properly assess the appropriateness of a company seeking admission to AIMโ€.

At the time, Seymour Pierceโ€™s new chief executive Phillip Wale, said in a statement he accepted the sanctions and that โ€œmajor changesโ€ had been put inย place.

Seymour Pierce later went into administration and in 2013 it was bought by Cantor Fitzgerald. However, much of Seymour Pierceโ€™s senior team remained in their role at ย Cantor Fitzgerald โ€” Siriusโ€™ currentย nomad.

Despite repeated requests, Cantor Fitzgerald did not respond to DeSmog UKโ€™s repeated requests for comment for thisย story.


Read DeSmogย UK‘sย Empire Oilย series:

Part One –ย Black Goldโ€™: Londonโ€™sย Africanย Oilย Hub

Part Two –ย Takingย AIM: Londonโ€™s Wildย Westย Stockย Market

Part Three –ย Exposed: The Elite โ€˜Boys Clubโ€™ Running Londonโ€™sย Opaqueย Oilย Network


Image Credit:ย Daniel Chapman/ย Flickr/ย CCย BYย 2.0

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