Things just go from bad to worse for beleaguered Quindell (LSE: QPP). The AIM-listed company released a terse RNS this morning:
“Quindell Plc (AIM: QPP.L), a market leading global provider of professional services and digital solutions, announces that Canaccord Genuity Limited submitted its one month notice of resignation as the Company’s financial adviser and joint broker on 21 October 2014 but that the Company has agreed that the resignation is effective today”.
Canaccord had been hired by Quindell in July last year to work alongside the company’s existing nominated financial adviser (Nomad) Cenkos Securities.
The relationship hasn’t been particularly fruitful. In particular, Quindell suffered a major embarrassment in June this year when its application to move from AIM to London’s Main Market was rejected by the UK Listing Authority for reasons that have never been fully explained.
Quindell has regularly been accused of making less than full and transparent announcements — signed off by its Nomads. Indeed, today’s announcement itself has raised eyebrows. If Canaccord resigned on 21 October, why has it taken Quindell until now to inform the market?
Scandal
The Nomad system is the primary way the AIM market regulates companies. The role of a Nomad is “advising and guiding an AIM company on its responsibilities under the AIM Rules”. If a company loses its Nomad, for whatever reason, the company’s shares are suspended, and the company has just one month to find a new Nomad or face being de-listed.
The resignation of Canaccord leaves Quindell still with a Nomad in the shape of Cenkos, but Cenkos is in the midst of a scandal over controversial “loan facilities” entered into by directors at Quindell — and a number of other AIM companies — with a US firm called Equities First Holdings LLC (EFH).
Quindell’s first announcement regarding EFH, on 5 November, signed off by Cenkos, was particularly opaque. Cenkos subsequently issued a non-regulatory note, purporting to clarify the nature of the deal between three Quindell directors and EFH, which also proved to be misleading. And a further clarifying — regulatory — announcement was put out last week by Quindell … which still doesn’t fully clarify matters.
Will Cenkos follow Canaccord?
There looks to be a risk of Cenkos also being fired or resigning, leaving Quindell in need of a new Nomad. The trouble is, it’s hard to see Quindell finding one. The company has become a hot potato with the latest shenanigans following on from a scathing attack on the company by US shorting outfit Gotham City Research in April and, more recently, allegations of fraud by UK blogger Tom Winnifrith, against whom Quindell says it will be taking legal action.
Quindell’s shares have been in decline since reaching a high of 660p last February. They’ve taken another hit this morning, and are trading at just 60p at the time of writing.