An investment firm has raised many red flags about Ascendis Health’s plans to plans to delist and has called on stakeholders, shareholders, financial market regulators and law enforcement “to put an end to this corporate fraud”.
In documents released on Friday, Black Mountain Investment Management hedge fund manager Mohamed Dhorat said they wanted the Ascendis general meeting on April 23, where shareholders will vote on plans to delist via an offer to shareholders, to be suspended, and “all concert parties as highlighted in the documentary evidence are sterilised ahead of any vote for the delisting”.
In contrast, a report by financial advisory firm BDO in February found the Ascendis’ offer of 80c a share to buy out shareholders and delist was fair. The share price was unchanged at 81c on Friday. Five years ago the share price was R4.10.
Ascendis’ management said they did not want to comment on the allegations as they expected further legal action may arise. The company said also that much of the latest claims had already been vented with the relevant authorities, such as the JSE, and had been dealt with, but they would continue to co-operate with the authorities.
The hedge fund manager said Friday they was investigations and prosecution into criminality such as insider trading and other corporate malfeasance, and censure and delinquency proceedings taken against the board of directors. They also want shareholders to vote against the “fraudulent delisting.”
When questioned by Business Report on Friday, the JSE’s Issuer Regulation GM Annalie de Bruyn said: “We are considering all the information submitted this morning.”
Ascendis’ offer to minorities so that the company can be delisted has already been dogged by controversy, as its first meeting for the shareholder vote had to be rescheduled after a shareholder had laid complaints to the Takeover Regulation Panel (TRP) about the independence of some directors involved in the process.
In addition to instances where Dhorat claimed there was insider trading, he said a possible mistake in not disclosing Yen Investments as a concert party to the vote, and a supplementary information notice to the JSE relating to additional related or concert parties, “begs the questions around trading on inside information and how many other concert parties are yet to be revealed.”
Dhorat concludes in the statement: “...it is also clear the delisting approved by the board is illegal.
“Furthermore the independent board is not independent, and lastly there are many more concert parties among some of the biggest shareholders, of which evidence presented herewith should be enough grounds on a balance of probabilities, to necessitate thorough investigation…”
BUSINESS REPORT