Anger over ‘shambolic’ phone app shares sale

11 months ago 140

Britain’s fiscal regulator faces disapproval this play implicit the “shambolic” listing connected the London Stock Exchange of a healthcare institution facing allegations that immoderate of its shares were traded fraudulently.

The Financial Conduct Authority (FCA) approved Umuthi Healthcare Solutions for admittance to the London Stock Exchange (LSE) successful March. The institution has developed a smartphone app to assistance medicines scope doctors successful distant agrarian areas.

Trading is present suspended successful the firm. Police successful South Africa are investigating claims that millions of nonexistent shares were sold to investors for astir £2.45m earlier the flotation.

Anthony Morris, of the Umuthi large shareholder group, said: “This listing has been a implicit shambles and should ne'er person been allowed. There has been an abject nonaccomplishment by the Financial Conduct Authority.”

The steadfast denies immoderate wrongdoing. It said the claims acrophobic stock income anterior to its nationalist listing betwixt backstage individuals that “do not impact the institution oregon its directors”.

The LSE’s main marketplace has astir 1,300 companies from much than 70 countries. Listing is described arsenic a “badge of quality”.

The FCA, which reviews institution prospectuses earlier admittance to the LSE, has faced disapproval of its show and effectiveness implicit the past twelvemonth aft a drawstring of fiscal scandals. Campaigners described the disclosure earlier this period by the Observer that the regulator has paid unit much than £125m successful bonuses since 2016 arsenic an “absolute insult”.

Umuthi has operations successful South Africa, but wants to grow to different African countries and Europe.

The South African Police Service said past week that the company’s main executive, Gert Viljoen, and a pistillate consultant, Connie van Nieuwkerk, were arrested implicit fraud allegations earlier this month.

A constabulary spokesperson said: “It is alleged that the CEO with different enforcement persuaded the shareholders to bargain shares that did not exist. Thirty shareholders mislaid R50m [£2.45m] owed to misrepresentation. The probe is continuing.”

Investors assertion the FCA missed a bid of reddish flags that should person blocked the listing. Van Nieuwkerk was fined by fiscal watchdogs past twelvemonth successful South Africa for the work of fiscal statements that were mendacious oregon misleading.

One of Umuthi’s non-executive directors, Colin Bloom, a salient Conservative enactment protagonist and a authorities advisor connected faith, said helium had resigned from the institution past month. He said helium had nary cognition of immoderate suspicious enactment and has asked the Serious Fraud Office to investigate.

Umuthi has developed a smartphone app that allows doctors and pharmacies successful distant areas to straight bid drugs from healthcare suppliers. It was listed connected the LSE connected 4 March, but trading is present suspended.

Umuthi said successful a trading update connected Thursday: “Mr Viljoen has been released connected bail. The allegations look to subordinate to over-the-counter merchantability of Umuthi shares, transactions implicit which the institution and Mr Viljoen had nary power oregon involvement.

“In addition, a advisor to the company, Connie van Nieuwkerk, was arrested arsenic portion of the aforesaid allegation.

“Ms van Nieuwkerk had nary operational relation astatine the company.

“As a effect of the arrest, the institution has terminated forthwith the consultancy statement with Ms van Nieuwkerk.”

Viljoen has denied immoderate wrongdoing and says the listing went done “rigorous verification processes”. Van Nieuwkerk did not respond to a petition for comment.

An FCA spokesperson said: “We are alert of the issues raised present and are liaising with the applicable authorities successful South Africa. As issues relating to the institution emerged, we instantly suspended the listing to support investors, and astatine the existent clip it remains suspended.”