How Unfortunate – Merchant House Group now advised by Firm Formed by Rangers FC Director

Google news alerts are excellent. Today up popped news of a company which I have mentioned before, Merchant House Group.

As a quick recap, Merchant House Group (MHG) was described in one Investor Briefing in January 2012 as being “well advanced in the process of transformation from an unprofitable small corporate finance house specialising in the currently moribund niche of fund-raising on AIM and PLUS markets into a profitable financial services group focussed on investment products for the UK retail market.”

It is stated, “We particularly note new management has made some excellent deals with administrators of insolvent companies.

The biggest shareholder in MHG is Liberty Capital, holding just over 18% of the shares. This is the same Liberty Capital incorporated in the British Virgin Islands and of which Mr Craig Whyte has stated he is 100% owner.

The chairman of MHG is James Holmes, with whom Mr Whyte has had various business dealings in recent years, being directors of various companies together.

On 29th June 2012, MHG announced that its nominated advisers had resigned. As the release stated:-

“Cairn Financial Advisers LLP (“Cairn”), the Company’s incumbent nominated adviser, has agreed to remain in situ until the earlier of the appointment of a new nominated adviser and 31 July 2012.

In the event that the Company does not appoint a new nominated adviser by 31 July 2012 and if trading in the Company’s shares has resumed by that date, trading in the Company’s shares will be suspended with effect from 1 August 2012.

In accordance with AIM Rule 1, if the Company fails to appoint a new nominated adviser within one month from the effective date of Cairn’s resignation, the admission of the Company’s securities to trading on AIM will be cancelled.”

However, all is well and we need not fear suspension of the shares in MHG (because trading in the shares is suspended already!).

Today MHG announced:-

“The directors are pleased to confirm the appointment of Allenby Capital Limited as the Company’s Nominated Adviser and Broker with immediate effect.

Further to the announcement of 26 June, the audit of the annual accounts for the financial year ending 31 December 2011 continues although the late start due to the challenges in the business previously reported means that the annual report is now expected to be published in the second half of August. The directors anticipate that when the annual accounts have been published, the suspension of trading on AIM in the Company’s ordinary shares will be lifted. Combined with the fundraising, appointing a new custodian and a strengthened board already announced, this will successfully conclude the short-term goals following a challenging six months. The whole team has worked hard in difficult circumstances to reach this point.”

Late accounts? Sounds very familiar to those who followed the history of Mr Whyte’s companies…

Why does Allenby Capital, the new adviser, sound familiar?

In March 2011 there was a feature published in Growth Company Investor, profiling Imran Ahmad.

As the article says:-

“Straight talking Imran Ahmad is the founder and chief executive of Allenby Capital, a fast growing broker based in Mayfair.

The business is the brainchild of Imran Ahmad and though only founded in 2009 it already has 31 clients on the roster and is now ranked 14th in the latest Hemscott rankings.

Allenby was established with £200,000 provided by Ahmad, who still retains a majority 80 per cent interest.

Business is brisk, with Ahmad pitching to up to ten businesses a month. Many of these are public companies that are being sidelined by larger brokers as they move upscale – a fertile trading ground for Allenby. He says ‘liquidity is key and there will always be money out there if the deal is right.’ Ahmad believes the institutional appetite for sub £100 million market cap companies will never be what it was – instead you have to be smarter to access capital.

A point not lost on his Mayfair base where he has tapped into several family offices – home to untold hoards of cash. On the Allenby website it states that clients seeking up to £30 million should get in touch. Recent deals include a £6 million fundraising for Urals Energy, an oil company in Russia, and Allenby was sub agent on the recent £11 million fundraising for Niche, the vehicle of mining deal entrepreneur John McKeon. However, Allenby was also the lead broker on Atlantic Coal, which recently raised £12 million, and Ahmad is confident a £20 million fundraising will not be far away. Another client, AFC Energy, has been a soaraway success and Ahmad also likes cloud computing minnow Nasstar.

Ahmad is a consummate networker, tending to attract new business from lawyers, accountants and financial public relations firms. Future potential deals include a filtration membranes business that turns stagnant water to that which is safe to drink. Emerging markets also appear to be an increasing theme as AIM continues to attract overseas players. To this end he has had interest from a China-based oil and chemical tankers business.

Allenby is profitable and growth in the short term will be organic – next on the list is the recruitment of a resources analyst. Further out he might be interested in acquiring a straight agency private client broker. Though Allenby has no FSA permissions to hold client money, this avenue could provide a solution as well as offering access to wealthy individuals.”

Allenby Capital advised Nova Resources Limited, where Mr Green was Chairman till his resignation “to pursue other interests”.

Mr Ahmad moved on from Allenby to Zeus Capital last year, and is now a director of the Rangers Football Club Ltd.

STV reported that:-

“During Mr Ahmad’s time at Allenby Capital Limited, the firm acted and still is broker for The Weather Lottery, which provided Rangers with online betting and lotto services in 2010. It ended up in a court dispute with the Ibrox club claiming the Doncaster gambling business owed it £30,000 in unpaid profits.

Two employees of the Weather Lottery were convicted of fraud last November, which was highlighted in annual results as one of the contributing factors towards the company’s loss of £789,000 reported until July 2011.”

Even though Mr Ahmad left Allenby Capital in September 2011, records at Duedil.com indicate he is still the 80% shareholder. This might simply be a delay in records being updated, as the Rangers website indicates that he sold his stake in September 2011.

There are only seventy listed Nominated Advisers in London.

It can therefore be nothing other than coincidence that a company in which the largest shareholder is a company owned by Craig Whyte has taken on as Nominated Adviser a company closely connected to a director of Rangers.

Sadly such a connection will have those Rangers FC supporters anxious that Mr Whyte will re-appear in some guise or other concerned by the apparent close connection.

It’s not possible…is it…he can’t be coming back…

It is merely a matter of statistical chance of course. Bearing in mind that there are seventy Nominated Advisers in London, MHG were sure to end up with one with a Rangers connection sooner or later…

Posted by Paul McConville

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25 Comments

Filed under Charles Green, Craig Whyte's Companies

25 responses to “How Unfortunate – Merchant House Group now advised by Firm Formed by Rangers FC Director

  1. Joseph

    I don’t know how you do it Paul, but well done again. What a tangled web we weave! They’re all in it together. It’s a big club and the members are the lowest form of human beings, preying on the weak and filling their pockets with false gold. I hope this blog keeps the pressure on these parasites.

    • mick

      @joe well said parasites is the only way to describe them ,Scotland has to call a halt to these types via the courts there stianing or reputation abroad and putting of inward investment time for the law to step in and close them all down with new rules there making a mockery of the law

  2. mick

    maybe Imran Ahmad would llike to make a statement clearing it all up for us ,great read paul well spotted the power of the net is amazing ,Mister whyte and mister Ahmad are old business buddys now theres a thing ???as the show roles on enter mister whyte the “Principal Boy”or the “The pantomime antagonist”depends what school you went to a have him down as the “Principal Boy”that would just be comedy gold ,roll up and buy your season ticket Craig Whyte,s got bills to pay lol

  3. mick

    “Principal Boy”getting ready for his comeback

  4. mick

    just when you thought it was all over lol

  5. Greg72

    Paul, if that post hadn’t been yours, I think I wouldn’t have believed it! I’m interested to note that my elderly, cyinical, mind is still able to boggle!

  6. mystic meg

    This is really turning into a Greek tragedy with more twists and turns than an Octopuses garden! Can it be true that the Father of the gods is using his youngest son to help, in an underground manner, get the dough back?

  7. Delbhoy

    Nicely put together Paul. Not long ago you had ‘six degrees of Kevin Bacon’. According to Brett Tjaden at the University of Virginia, the record ‘Kevin Bacon Number’ is 2.62 by Rod Steiger ( the least amount of steps to connect Rod to any other actor ).Now, from Greene and Ahmad, to Allenby, to MHG and Whyte, it seems its only a matter of diligence before Charlie and Craig are revealed as the mutant siblings of SDM ( a score of 1.5 and 1.7 ).
    Keep digging.

  8. Impressive digging Paul – it could well be that you have performed a very great public service in all this, as it may lead to certain links being finally made public. Could it be that at least some of the money the taxpayer is due might actually be backing Green’s increasingly whiffy consortium?

    I rather expect there have been some big guns waiting in the wings for the football side to be settled (tv deal, memberships and licences etc) so they could really then go to town on some of the real villains of the piece – remember, not only has Rangers as a club (in whatever form), hardly been punished for anything yet, not one person or group (directors, management) has yet to be investigated, charged, fined.

    Could it be that the beginning of the proper end is nigh? Hold onto your hats, folks.

  9. Ernesider

    Paul

    Hard enough to follow, but becoming ever clearer what type of people David Murray handed over the future of Rangers to.

    There seems to be an alternative financial world, at least partly populated by con-men and chancers, that I knew nothing about, but I refuse to accept that David Murray didn’t know what Craig Whyte’s business ethics were like.

  10. ecojon

    What has always puzzled me is what the likes of Ahmad sees in Rangers. The obvious answer is profit but, compared to other financial opportunities, it can never be a major deal and it will be played out in the glare of publicity which many involved in the Alternative Investments Market (AIM) often avoid.

    What should be remembered is that to float on AIM a company needs to have a NOMAD (Nominated Adviser) and NOMADs are key to the whole AIM operation and also underwrite it – it will be interesting to see who the NOMAD for the AIM Float of Rangers will be.

    As I explained in a previous post most football clubs who entered AIMS have left and the insistence of an AIMs flotation by Charlie Green has always intrigued me.

    FOOTBALL FAN FINANCIAL ALERT

    http://en.wikipedia.org/wiki/Alternative_Investment_Market is intereresting and perhaps explains why gullible football fans might be a prime target for an AIM flotation driven as they are with a blind passion for their club.

    ‘Another important element of AIM’s model is the composition of its investor base. Although AIM-listed companies are not start-ups, most are small and highly risky. This may prove to be hazardous for unsophisticated investors who lack both the knowledge and resources to conduct proper inquiries into a firm’s prospects and activities, or even larger investors which lack strong internal control and risk management requirements. As a consequence, AIM’s investor base is largely composed of institutional investors and wealthy individuals.

    Because AIM is an exchange regulated market segment, it escapes most of the mandatory provisions contained in European Union directives – as implemented in the UK – and other rules applicable to companies listed in the London Stock Exchange. AIM believes self-regulation is pivotal to AIM’s low regulatory burden: companies seeking an AIM listing are not subject to significant admission requirements.

    Nomads are liable for damages from tolerating misdemeanors on behalf of their supervised companies, including the loss of reputational capital. However, this heavy reliance on Nomads has been criticized as creating a conflict of interest, since Nomads receive fees from the companies they purportedly supervise while, in practice, managing to avoid liability for market misconduct.

    In March 2007, U.S. securities regulator Roel Campos suggested that AIM’s rules for share trading have created a market like a “casino”. Campos reportedly said: “I’m concerned that 30% of issuers that list on AIM are gone in a year. That feels like a casino to me and I believe that investors will treat it as such. . . . AIM has since issued new rules requiring that listed companies maintain a website. (WOW that will make a BIG difference!)

    AIM has come under additional criticism for allowing Langbar International to be listed.[8] At £375 million Langbar is the biggest share fraud on the Exchange to date. It was investigated by the Serious Fraud Office[9][10][11] and the City of London Police. It was discovered in November 2005, that Langbar had none of the assets it declared at listing and this was due in part to the failure of the Nomad (Nominated Adviser) to carry out Due Diligence and the Exchange failing to ensure that the AIM rules had been complied with.

    AIM fined Nabarro Wells £250,000 and publicly censured them for breaches of the AIM rules.(WOW! again I’m sure that was a comfort to those who lost £375 million and I wonder if the Nomad got their commission up front which would have made the fine a flea-bite).

    In March 2007 the Daily Telegraph noticed a tendency to use listing vehicles incorporated in Offshore financial centres prior to floating on AIM. Some 35% of the companies floated on AIM during 2006 were from OFCs, of which the majority came from the Channel Islands or the British Virgin Islands.

    So, at the end of the day, you invest your money and . . . ?

    What I really can’t get to grips with is that I thought if you had a company with, or were seeking, a stock exchange listing you wouldn’t want to damage the company or indeed the sector in which it traded. And that this would apply to investorts.

    And yet there has been a wholesale attack on Scottish Football from Charlie Bhoy, with bigotry claims and a seeming relish at the prospect of SPL financial meltdown. Strange considering this is the goal after the Long March and the one place which might provide institutional investors and wealthy individuals with a return on their investment.

    Obviously there must be more to the workings of AIM than meet the eye of a simple investor.

  11. isnibs

    Brilliant again Paul,
    Keep on digging

  12. Macduff

    Amazing stuff again. It will come to something if Bomber Brown is right.! This coupled with the Octopus links as well will make a hell of a flow chart….

  13. Aitch

    How unfortunate to be a supporter of Rangers at this time and trying to find something that will give hope for the future, something that they can emotionally invest in as well as throw their money at. Is Sevco/The Rangers Football Club it? Looks like you may well have raised further doubt for those bluenoses left with a functioning brain cell who don’t really wish to assume the stance whilst they get shafted, yet again!
    How unfortunate to be certain football reporters (we know who) whose reporting of this enternal saga has been lagging behind the ‘Internet Bampots’. Even when provided with new information via the ‘99% crap’, they have continuously avoided asking the hard questions of key parties. Being the consummate professionals that they are, we could never question their reporting to be coloured by prejudice or resentment; could we?
    I don’t comment that often but I’m online daily to my favourite trinity of Paul, Paul and Phil. Thank you and your fellow providers of information and analysis that keep attracting us ‘Internet Bampots’ to your sites.

    • ayrfan

      this topic now even appears on rangers rumours – without accreditation.

      Hope for gers fans should be – no stone is being left unturned, and they can invest in rangers in AIM with full range of facts to help decide, otherwise even more debts can be racked up – footballers signing contracts for x years – is that not just a new debt ?

  14. ADM

    Fine piece of digging, Paul. Think ecojon’s post lays out neatly the decline of AIM which started out to be a capital-raising vehicle for small companies unsuited to the full demands of LSE listing but has deteriorated to a haven for some decidedly dodgy organisations.

  15. Chriske

    @ ecojon
    I don’t understand Ahmad’s interest in RFC either, surely he has bigger fish to fry. Perhaps there’s a previously unknown oil well under Ibrox.
    Thanks again Paul, sterling work!

  16. ian lewis

    While it’s clear that the Sevco hierarchy don’t think too highly of the mental capacity of their supporters surely they don’t think they are daft enough to ever buy shares in the company.

  17. beanos

    and the plot thickens again…..

    it does seem hard to believe that if Murray (who they treated pretty much like a god at the time) couldn’t get the fans to buy into the idea of a share issue that Green after all the shenanigans so far will manage to pull it off.

    after the publicity they have had its hard to see anyone investing. Nobody could genuinely see it as a profit making venture and the fans will be suspicious and unwilling.

  18. ecojon

    Was reading the story about Whyte’s Bentley in the Record and see ownership is now going to proof to stop his missus selling it.

    Supposedly now owned by Liberty Corporate Limited, which is part-owned by Mr Whyte’s British Virgin Islands-based Liberty Capital Limited.

    Liberty Corporate Limited has been a dormant company for a number of years – ah’ll need to forget my flotation in AIM and get a dormant company as it’s no bad if you get a Bentley wae it 🙂

    Amazing how a dormant company can own a Bentley – still I see that accounts made up to 31/05/11 were submitted on 11/05/2012 but that the next return for 27/06/2012 is OVERDUE.

    Wonder when they’re submitted whether there will be any mention of a Bentley or maybe that was in the accounts submitted in June. I’m almost tempted to go up to Inverness in August to listen to the ownership case but civil actions are terrible for getting delayed.

  19. JimBhoy

    the guy is a complete rat……. well done to Dundee Utd tonight, go arabs…

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