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London Stock Exchange cancels Umuthi’s listing amid shareholder turmoil

Daily Maverick logo Daily Maverick 2022/07/05 Tim Cohen

The London Stock Exchange has cancelled the listing of Umuthi Healthcare Solutions, drawing a line under an extraordinary trading battle involving the SA-based business.

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The company began trading on the main board of the London Stock Exchange (LSE) on 4 March 2021, creating a new and unfortunate record by being unilaterally suspended only six days later after questions arose about the supplementary prospectus which allegedly contained misleading information.

The company was relisted after a new auditor was appointed, but was then suspended again in June 2021. 

The UK Financial Conduct Authority (FCA) was concerned that “some shareholders who were involved in a share exchange agreement prior to the company’s admission to trading, [were] not able to trade all of their shares”.

The insinuation was that some shareholders – who claimed to have bought shares – did not end up being included on the official list of shareholders when the company started trading. Consequently, the allegation was that some shareholders were defrauded.

The plight of the company was made worse when a disgruntled shareholder disclosed that one of the people who was, for a time, in charge of the listing process had been debarred by the SA’s Financial Services Board. Connie van Nieuwkerk was found to have manipulated company results when she worked for a time at the AIM-listed company African Dawn.

Van Nieuwkerk had evaded the due diligence process, such as it was, by using her mother’s maiden name, Van Vliet. Van Nieuwkerk was subsequently arrested in SA for criminal charges relating to this incident and is awaiting trial. 

During the listing process, the company has been in a relentless battle with one of its shareholders, Anthony Morris, who was appointed by a group of disgruntled shareholders to represent their interests. Morris says  48 shareholders representing over 40 million shares are still owed 25 million shares bought from the official representative of the listing Chief Investment Officer Connie Van Nieuwkerk.

Umuthi CEO Gert Viljoen said in an email yesterday that “time, unfortunately, caught us”. He said Morris, “with his poison darts every week and stop-start procedures with all the various parties, made it very difficult to restore Umuthi in time as expected”.

“We are given the opportunity to appeal. However, we are considering all options. 

“We have created such a fantastic platform to bring funding and jobs to South Africa,” he said. 

Morris refutes this version. “They were given over one year to get their house in order. Normally a suspended company is delisted after six months. I did not delist Umuthi. The London Stock Exchange delisted the company based only on facts and irrefutable proof in hand – as they are appointed by the Chancellor of the Exchequer as the official Regulator of UK Markets. 

“The fact is that they consistently failed to provide proof of all shareholders being happy with their allocations month after month in the format asked for by the Primary Market Oversight and Enforcement team at the FCA,” Morris said. BM/DM

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