Over the last 10 years, four different companies have acted as a nominee advisor, also known as a nomad, for Sirius Petroleum.
A nomad is a private company which carries out due diligence on a company that wants to list on AIM. A company’s nomad is then responsible for the oversight and guidance of the company throughout its 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 of interest.
There are currently 31 nomads operating on AIM, carrying out due diligence for nearly 950 listed companies.
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Evidence shows the four companies that advised Sirius on AIM:
- Had ties with the company’s board of directors;
- Were acting as Sirius’ broker, creating a conflict of interest
- Have a history of advising companies which delisted from AIM amidst allegations of corporate wrongdoing.
Here is a run-down of Sirius’ nomads:
Canaccord Adams, now known as Canaccord Genuity, was Sirius’ nomad between 2008 and March 2010. During this time, several board members who previously worked at Canaccord joined Sirius.
Toby Hayward, a chartered accountant and investment banker, was appointed to Sirius’ board of director after previously being in charge of Canaccord’s oil and gas portfolio.
Despite repeated requests, Canaccord did not respond to DeSmog UK’s request for comments.
Strand Hanson acted as Sirius’ nomad between March 2010 and February 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:
“With 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 sports cars.”
At the time, Strand Hanson had made a deal with Russian investment firm Renaissance Capital, which operates in Lagos through its Nigerian subsidiary.
For a short time, Renaissance Capital acted as a broker for Sirius.
Meanwhile, former Renaissance Capital director Ed Johnson joined Sirius as chief executive. Johnson was also former head of oil and gas at Sirius’ previous nomad Canaccord.
Strand Hanson also acted as a nomad for a string of AIM-listed companies accused of fraud and corruption.
The group acted as a nomad for Sibir Energy before the Financial Services Authority fined the company’s chief executive £350 for “engaging in market abuse” 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 company’s asset.
Strand Hanson also advised billionaire Frank Timis’ company Regal Petroleum.
In 2009, Regal was fined a record £600,000 by AIM’s disciplinary committee for failing to ensure the information it notified to investors “was not misleading, false or deceptive” 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 commercially viable.
In a statement, Regal Petroleum said it was pleased to put this “historic episode” behind it, adding there was no suggestion that its management team “conducted their responsibilities in anything other than a proper and professional manner.”
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 UK’s request for comment but a spokesman added the company “abides by all relevant law and regulation at all times”.
Cairn Financial Advisers acted as Sirius’ nomad between February 2013 and September 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 Capital’s ventures — Sirius Petroleim’s key 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 was privatised.
Despite repeated requests, Cairn Financial Advisers did not respond to DeSmog UK’s request for comments.
Cantor Fitzgerald has served as Sirius’ nomad since September 2016.
The company has advised a number of companies which were booted out of AIM or went bust following allegations of malpractice and 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, served as a non-executive director for Sirius 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 “all charges have been irrevocably dropped by the Liberian authorities” and “strongly refutes any allegation that they [he and Sable Mining] had acted unlawfully in relation to Sable’s business affairs in Liberia or indeed elsewhere”.
But the man heading the prosecuting team in Liberia, Fonati Koffa, told Global Witness this was a “blatant and utter lie”, adding “no comprehensive investigation I am aware of exonerated these people”.
The allegations of wrongdoing were first uncovered by Global Witness in a major investigation into the activities of Groves and Edmonds through AIM-listed 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 company’s malpractice in Zimbabwe, where Camec lent $100 million to Robert Mugabe’s regime, and in war-torn Democratic Republic of Congo where it reportedly acquired assets from “dubious provenance”.
In 2009, Edmonds and Groves sold Camec to FTSE 100 Eurasian Natural Resource Corporation (ENRC) for over half a billion pounds.
Two years later, Camec’s nomad Seymour Pierce was fined by the London Stock Exchange for failing to “undertake adequate due diligence and to properly assess the appropriateness of a company seeking admission to AIM”.
At the time, Seymour Pierce’s new chief executive Phillip Wale, said in a statement he accepted the sanctions and that “major changes” had been put in place.
Seymour Pierce later went into administration and in 2013 it was bought by Cantor Fitzgerald. However, much of Seymour Pierce’s senior team remained in their role at Cantor Fitzgerald — Sirius’ current nomad.
Despite repeated requests, Cantor Fitzgerald did not respond to DeSmog UK’s repeated requests for comment for this story.
Read DeSmog UK‘s Empire Oil series:
Part One – Black Gold’: London’s African Oil Hub
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