The big news for Quindell (LSE: QPP) watchers over the weekend was the story in the Sunday Times that the company is searching for a new nominated adviser (nomad).
According to the report, David Currie, who took over the running of the company after founder Rob Terry was forced out, has approached a number of brokers in the City to try to find a replacement for current nomad Cenkos Securities (LSE: CNKS) — and at least one has apparently said no.
Good news or bad?
Looking round the reactions so far, it seems that both bulls and bears are claiming this as vindication of their respective positions.
Ridding Quindell of its association with the Terry regime would seem like a sensible strategy for a new management team to adopt, and if that’s what’s happening then it would be natural to ditch Cenkos.
After all, if you were the new boss, would you really want to stick with the nomad who apparently signed off on the RNS that claimed that Terry and two other directors were buying new Quindell shares using a loan from Equities First Holdings (EFH), when in reality they were massive net sellers? Especially as Terry went on to ditch almost his entire holding (and as he’s now below 3% ownership, we may never know if he sells the rest)?
Sensitive information?
And wouldn’t you want to part company with a nomad that either didn’t keep itself informed or seemed to think it was fine to sit on the news that joint broker Cannacord Genuity had resigned on 21 October and not tell the punters until 17 November? Especially as the controversial EFH deal was happening over the same period? And as it has raised questions about the company’s adherence to rule 11 of the AIM code which says that any sensitive information that might move a company’s share price must be immediately released to the market?
Yes, if you were a Quindell shareholder or a member of the board, I could really understand why you’d be happy to see the back of Cenkos.
On the other hand, what if Cenkos is quitting and Quindell is in desperate need of finding a replacement? After all, having a nomad is a requirement for a listing on AIM, and without one a company would have its shares suspended.
Presaging catastrophe?
Coming so soon after the resignation of Cannacord, Cenkos throwing in the towel while there’s an independent review of the company’s accounts and practices under way, and just after we heard that Quindell’s much-trumpeted rise in Q4 cashflow “has not been as significant as previously anticipated“, could be the last herald of disaster.
So, is this a much-needed step back towards respectability, or is it the next chapter in an investment horror story? Time will tell. And soon.
