Andalas Energy & Power (LON: ADL). What’s going on within and out-side of the company? It would seem that there’s a very slow tick up of the SP underfoot. News has been reaching ‘Yours Truly’ that Andalas are the target company of at least one and possibly ‘others’ who are sniffing around to take full Board control of the Company. I won’t go into each individual group as they may or may not be in direct talks with ADL. What I will do is disclose my take on one of the groups who HAVE made an approach (I believe pre or during Colter drill) and are in contact with some of the Major Share-holders.
It could be about to hot up at Andalas Energy. Now the emphasis is on ‘could’. So I’d ask investors/traders to keep that word in mind. There’s reasons for that. The chief one being the corporate world of ‘wheels & deals’ doesn’t run to the time-line of you/me, it can get and does get snagged up in back-room compliance/negotiation. That is to say nothing is certain until it’s what’s known in corporate speak as ‘Inked‘. (Signed sealed & delivered).
What I do know from my research is that a group have approached the ADL Board, seeking a corporate takeover via the introduction of $10M of assets/cash. It’s known as a ‘Plug & Play’ package, if that deal happened then ADL would have rocketed upwards, probably over 1p. For whatever reason/s those talks petered out but I can now exclusively reveal that those talks have been reignited with ADL Major Shareholders. Whispers are again surfacing that Major shareholders are now aware and have been approached for the 1st time by well-known successful corporates with a proven track record not only with the drill bit but with increasing SP value for their share-holders.
Major shareholders were not informed by the Board of ADL on the first approach. I have an ‘idea’ of the names of those corporates having had many cagey conversations with various market sources. The asset/s from one of the groups are rumoured to be Cuban/Mexican. I can’t confirm that but what I can confirm is that predatory moves are almost certainly going on in the back-ground. At what stage they are and if they’ll ever come to fruition is as I said further up in this piece subject to ‘back-room compliance/negotiation’. Nothing is certain until it’s ‘Inked‘ .
Target ADL?
‘Plug & Play‘ as some will recall is what was used on a company called IRG which had a meteoric rise when the new board and initial investment/assets was announced. For a ‘plug and play’ to work any investment group have to find a relatively low value m/cap company £1-4M, to offer the financiers potential multiple returns on initial investment just as IRG did. ADL has a current m/cap of £1.5M , the listing on the exchange itself is worth £600/800K. Cash at hand is circa £500K. Ergo it doesn’t take much to realise why ADL are being targeted, either officially or unofficially. But ‘Target’ they are. Companies at shell value can, on a slither of good news spike, secondly there’s always predatory action in the back-ground that can also re-rate the shell. Hence why I took a ‘slug‘ of shares. Even on no news ADL will slowly tick up.
So, bearing in mind how convoluted and difficult it is to predict with any degree of certainty the outcome of back channel discussions, I think it’s well worth a small punt.
Take The Deal!
As I see it the main sticking point to any deal getting Inked is the current Board who like all corporates don’t want to get off the gravy train unless their nest is feathered with downy £50 notes. I’ve tried to contact the CEO Simon Gorringe many, many times, he has thus failed/refused to make contact. Contact I might add with one of his small Major share-holders. That tells me that Simon is the sticking point to any deal. If you’re reading this Mr Gorringe, then do the right thing for share-holders. Get in-touch with the Cuban/Mexican Plug & Play group and take the deal!
Today’s RNS from Andalas Energy & Power (LON: ADL) all but confirms recent speculation that there are ‘issues‘ on the Bunga Mas (BM) transaction. Now the company will spin that it’s not their fault and the renewal of the PSC from the Government Of Indonesia (GOI) is onerous, but surely after all the ‘fookery‘ from the previous miss-management the new team must know that there are always problems when conducting business in Indonesia. It is par for the course. You can’t sign a PSC unless you have the cash or can prove that you can get the cash. The quality of the licence is immaterial.
Bunga Mas is a good asset. It has huge potential to flesh out any small oil minnow with real production. I know this because I have been on site and have had access to all the data available to me at that time. Nothing is set in stone when it comes to O&G, but basic economics and how to do business in-country, in Indonesia has to be learned. By now you’d think that ADL would be past masters at it! Investors need to realise that Bunga Mas will progress at the Indo’ pace not the Nutter BB pace. Andalas are not a one trick pony. Investors should hold for the results of the Colter drill, which is like BM, a potential company maker.
However, credit where credit is due to the Company and their head honcho Simon Gorringe. Who’ve came out and updated the market ‘Pronto’. That may be some what ‘cold comfort’ for shareholders but it does show that being honest, going forward, and updating your investor base in a timely fashion, no matter how unpalatable it may be, is a medicine few like to swallow even when it helps your recovery. So, it’s well done ADL on today’s RNS. Honesty is the best policy.
Now remember, Rome wasn’t built in a day. The Colter drill is on track and hasn’t been valued into the ADL SP. Should that come in then I can see the SP heading way over 2p, maybe even 3p. So it’s not bad news today. It’s as you were and let the Board get on running the company in the correct way. Hold for Colter. Common-Sense!
Further update on client recoveries and distribution,
client data notifications (GDPR) and cessation
of ISA manager status
Private & Confidential
To the Firms’ clients
Dear Sir/Madam,
Beaufort Securities Limited (“BSL”) in administration; and
Beaufort Asset Clearing Services Limited (“BACSL”) in special administration
(together the “Firm(s)” and the “administrations”)
We are writing further to our notification of appointment of the joint administrators dated 15 March 2018, in order to provide a more substantive update on the work we have been undertaking, the preliminary conclusions that we have reached and how we currently envisage being able to commence distributions to clients.
Events leading up to the Firms’ cessation of trade
Due to the circumstances surrounding the insolvency of the Firms, the appointment of the joint administrators occurred with very limited notice, which was unavoidable. Consequently, there was no time to make any plans as to how the disruption to clients might be minimised and the return of client assets could be expedited. As clients will be aware, BSL was (alongside certain other parties) charged with securities fraud in the United States of America. The Financial Conduct Authority (“FCA”) had also imposed various regulatory restrictions including a prohibition on all investment activity immediately prior to the Firms’ insolvencies.
Prior to the administrations, the Firms had submitted to the FCA, on a routine basis, various regulatory confirmations regarding the status, quantity and amounts of client money and client assets held by BACSL. We have examined these regulatory confirmations and they have provided an important starting point for the joint administrators to review and assess the sufficiency of the client money and assets held for clients as compared with what is owed to them. They do highlight some relatively modest deficiencies in both client money and client assets. The Firms had, however, sometime previously switched over to a new accounting and record keeping system. These issues, together with the complex nature of the administrations, may create further challenges in the tasks ahead of returning client money and assets to clients.
Steps taken immediately following the joint administrators’ appointment
Immediately upon our appointment, as we have previously advised, we took steps to safeguard the Firms’ data and systems as well as their assets (those held for clients and their own). We have materially reduced the scale of the Firms’ operations and brought in relevant experts to assist us in the conduct of the administrations.
We have also secured funding to ensure that all critical operations can be maintained in order to facilitate the return of client money and assets, in accordance with the proposed courses of action set out below.
Preliminary conclusions
We have carried out a full assessment of the Firms’ records, which enables us to reach the following preliminary conclusions:
in the absence of a surplus of funds within the Firms’ segregated resources and in accordance with governing legislation, relevant costs will need to be deducted from clients’ entitlements to client money and client assets.
client money and client assets were, as at the date of administration, substantially complete save for a very small number of isolated deficiencies.
a large number of the client securities are made up of illiquid or potentially nil value positions which will complicate the basis upon which costs may be levied against them.
in view of the issues identified, we have reluctantly ruled out an expedited return of assets without the statutory protection offered to clients and the joint administrators through a formal bar date and distribution plan.
a distribution plan is being developed (see below) as a matter of urgency and a realistic timeframe to commence returns for the majority of clients will be September 2018 at the earliest.
the FSCS will aim to make compensation payments to a client population who had only small client money balances with BACSL during May 2018.
the basis of allocating costs is also being developed and is likely to be levied by reference to value of the client portfolio and charged on a sliding scale (so that higher value portfolios will contribute more in absolute terms but proportionately less of the overall value of their portfolio of client money and client assets).
with a majority of clients likely to be eligible for Financial Services Compensation Scheme (“FSCS”) compensation with shortfalls and costs falling within the £50,000 compensation limit, we believe the substantial majority of clients will recover their portfolios in full in due course.
we do, however, estimate around 700 clients with client money and client assets together valued in excess of approximately £150,000 may experience a loss on their entitlements in excess of the FSCS’s £50,000 compensation limit.
clients who do not fulfil the FSCS eligibility criteria will not be entitled to receive FSCS compensation and will, regrettably, face a loss on their client money and assets.
Revised estimate of securities value
The indicative figures first published as to the value of the securities in the client assets portfolio have now been subjected to an initial independent valuation. This has highlighted a number of important issues, including as noted above the fact that a number of highly illiquid and potentially nil value positions are held. The carrying value used previously was based on a historic price which we do not believe appropriately reflects a more cautiously assessed valuation. The more conservative value for this assessment is in the region of £500 million.
Corporate actions
We have put in place new interim arrangements to manage the portfolio of custodied assets for corporate actions arising since our appointment, be this receipt of dividends or otherwise. We will provide an update at a later stage on our plans for dealing with clients’ accruing interests.
Clients owing funds to the Firms
A number of clients are indebted to one or both the Firms. Those amounts will need to be collected from the relevant clients as part of the client assets distribution programme referred to below.
Access to the Firms’ Client Portal
Shortly after our appointment, we suspended access to the Firms’ online Client Portal. We are in the process of updating the Firms’ records for the work detailed above and making other necessary changes to it. Once these are complete, we will provide access.
Plans for distribution programme
FSCS summary and overall client outcome
Irrespective of the method of allocating costs among clients, it is clear that clients will face shortfalls as a result of the Firm’s insolvency and ensuing special administration. In accordance with applicable legislation, however, we have worked closely with the FSCS and are able to confirm that, where clients have client money and assets held with BACSL with a shortfall (including reserves for costs) of up to a value of £50,000, the FSCS will seek to provide compensation to eligible clients without it being necessary for a claim to be submitted in most cases. Further information on FSCS eligibility is available here: www.fscs.org.uk/what-we-cover/eligibility-rules/.
Proposed distributions
We are developing on an urgent basis two strands to an overall programme of distributions:
We have worked closely with the FSCS to identify approximately 2,700 BACSL clients who held client money only, each of whose claim is less than £2,000 in value. FSCS will aim to compensate these clients in full during May 2018, without the clients having to submit an application form. No reserves for costs will be deducted in this context. FSCS compensation will compensate these clients in full, and they will have no further claim against the Firm in the special administration. A notification will be sent to qualifying clients separately. This notification will include details of the cash sum to be returned along with limited bank details (if any) and affected clients will have an opportunity to reject the distribution or notify the Firms of any amendments. (Any rejected claims will be deferred for distribution under the distribution plan described below); and
A statutory “distribution plan”, pursuant to the applicable insolvency legislation, designed to facilitate the return to clients of the balance of the client money and securities held by BACSL, running alongside a process of returning client money not covered by the distribution referred to above.
The applicable procedure laid down for the distribution plan by the relevant insolvency legislation entails the joint administrators:
Firstly, setting a bar date for claims in respect of securities: That bar date will be set by means of a notice currently expected to be distributed to all clients during May 2018. We presently anticipate that the bar date will be set for some time in June 2018. Under the applicable legislation, the effect of the bar date is that claimants who submit their claims after the bar date are not guaranteed to have their claims taken into account when distributions are effected, albeit the joint administrators will in any event take into account clients’ entitlements insofar as they are reflected in the Firms’ books and records. When notifying clients of the bar date, we will explain how clients can access a portal on the Firms’ website, designed to show clients what the Firms’ books and records show their entitlements to be, so that clients are in a position to submit any corrections or other information or documentation that they consider the joint administrators ought to take into account, prior to the bar date.
Secondly, preparing and circulating to clients (and the FCA, among others) a document setting out how they propose to go about returning the client securities in BACSL’s possession: This will be a detailed document and it will take some time to prepare. We set out below some of the substantive features that we currently expect it will have.
Thirdly, seeking and obtaining approval of the above document from the creditors’ committee: The joint administrators will be circulating details of an initial meeting of creditors and clients of BACSL. One of the purposes of that meeting is to constitute a committee, made up of creditors and clients of BACSL, which can then represent the wider constituency of creditors and clients during the remaining course of the special administration. It is a requirement of the applicable insolvency legislation that the statutory “distribution plan” be approved by the creditors’ committee, prior to being put into effect. Following the constitution of the creditors’ committee, therefore, there will need to be a meeting of that committee during which the joint administrators’ proposed distribution plan is considered and approved.
Fourthly, seeking and obtaining the approval of the above document from the court: It is a requirement of the applicable insolvency legislation that the statutory “distribution plan” be approved by the court, prior to being put into effect. Following the approval by the creditors’ committee of the draft distribution plan, therefore, the joint administrators will need to make an application to court seeking its approval.
As noted above, the statutory “distribution plan” applies to securities, as opposed to client money. In practice, however, in order to expedite the process of returning clients’ investments (of whatever nature) to them, the joint administrators are planning to deal with client money in parallel with the process for returning client securities. That parallel process will also entail the setting of a bar date and may also involve one or more applications to the court for approval of particular aspects of the process.
These procedures are important for the following reasons: if cash and/or securities were to be distributed to those clients to whom the Firms’ records indicate they are owed, without these procedures first having been implemented, it is possible that competing claims (not reflected in the Firms’ books and records) could subsequently be asserted by clients or other counterparties of the Firms; and that those asserting such claims might contend that the earlier distributions of securities ought to be disturbed, or that client money already distributed ought to be recovered from the clients to whom they were originally paid, for the purposes of meeting the late claims.
In the circumstances, a significant advantage to clients that will be secured by the joint administrators following the procedures set out above is that, once clients receive their cash and/or securities from BACSL in accordance with such procedures, the applicable insolvency legislation expressly provides that such distributions cannot be disturbed by late claimants who later assert that they were entitled to share in the relevant stock lines and/or cash pool (e.g. the clients will receive good title to the securities).
As appears from the above, however, the statutory process is necessarily complex, involving as it does a number of steps, including one or more court applications. There will inevitably be material costs associated with this process and such costs would ordinarily need to be paid for out of client money and assets, though the FSCS may be able to provide compensation in relation to the resulting shortfalls of eligible clients. The complexity, as well as the timeframes specified in the rules themselves, will also mean that there is a certain amount of unavoidable delay associated with the return of cash and securities.
The joint administrators currently anticipate the statutory “distribution plan”, and their parallel plan for distributing client money in accordance with the applicable rules will involve, among other things:
A transfer for clients holding client money (who have not been compensated by FSCS in relation to a small client money balance) and/or client assets up to a certain limit to a nominated regulated broker. We are in the process of identifying a recipient broker and will communicate directly with those clients included within this programme. A client will be able to nominate another new custodian but that may delay the eventual transfer depending on the circumstances at the time. This is a complex exercise to arrange and execute. We anticipate, however, that it may in this way be possible to effect returns to a majority of clients by number and value. We have explored the possibility of effecting such a transfer outside of the statutory process described above (with a view to effecting it more quickly than will be possible within the confines of that process), but we have reluctantly concluded that such is not practicable or, in any event, in the interests of clients, particularly in light of the point made above as regards finality once distributions have been made (i.e. clients receiving good title). As it is, the joint administrators hope that a transfer of this nature may be achievable September 2018 at the earliest.
A plan for effecting distributions of all remaining client securities and money, possibly involving further bar dates and/or the liquidation of unclaimed or other client assets. Given that the clients and/or the assets to which this part of the overall plan will apply will be those giving rise to complexities of one kind or another (failing which they would have been included in one of the other methods of return referred to above), it is likely that this part of the process will be time-consuming and therefore the relevant returns to clients will inevitably take place at a later date than those referred to above.
A methodology for levying costs against client money and assets and as noted above this is likely to be by reference to value and charged on a sliding scale. Costs will need to be assessed on a prudent (high case basis) and allocated against portfolios valued on a conservative basis. The methodology will need to offer alternatives to avoid assets being sold to settle costs (which may need to be carried out as a last resort) and also set out how any rebate for costs will be returned to clients once the final costs have been settled and value of illiquid and potentially nil valued positions finalised.
How the Firms and clients will interact jointly with the FSCS in order to streamline claims for shortfalls arising on their client money and securities interests through costs levies or otherwise.
Regulatory matters
We are working closely with the FCA regarding the distribution of client money and assets. All distributions will be subject to the approval of the FCA.
As part of the above, we will be seeking various “know your client” information and documentation. We shall provide guidance where specific actions on clients’ parts are needed.
Other claims for compensation
We are aware of some 700 claims against BSL by clients for compensation in respect of various matters, including poor investment advice. It is possible that further claims will be made and we will (as appropriate) develop a programme for dealing with these in due course. As regards what (if anything) relevant claimants might recover in respect of such claims, we note the following:
Distributions (if any) to ordinary creditors of the Firms through the insolvencies are likely to be minimal.
Clients of BSL who believe they have a claim for example in relation to negligent advice can submit their claims via the FSCS online portal at www.fscs.org.uk/your-claim/ with any compensation being capped at £50,000 per investor. This is separate from any claim the client may have in relation to a shortfall in client money or assets that were held by BACSL, where there is a separate £50,000 cap per investor and the FSCS will seek to compensate eligible clients without the need for an application to be submitted.
Existing claims against BSL being adjudicated by the Financial Ombudsman Service (“FOS”) are expected to be transferred to the FSCS. We understand the FOS is in the process of writing to all affected clients and will need client consent for this transfer to occur.
Once the FSCS is in receipt of the files, it will contact affected claimants. If a claim is accepted, the FSCS will pay compensation and will take an assignment of the claimant’s rights against BSL and any third party. This will enable the FSCS to seek recoveries, including from BSL’s Professional Indemnity Insurer, and there is no need for clients to seek their own recovery against the Professional Indemnity Insurer. Any recovery of insurance proceeds is likely to be limited.
Individual Savings Account (“ISA”) notification
We set out below formal notification to ISA clients.
In accordance with the ISA Regulations SI 1998 (No.1870) (the “ISA Regulations”), we are obliged to notify you that BACSL has ceased to qualify as an ISA Manager effective from 1st March 2018.
Ordinarily, individual ISA account holders are required to transfer their account to another ISA manager within 30 days of this letter to preserve the ISA status of their assets. However, having regard to BACSL’s special administration, HMRC have agreed to relax such a deadline in order to preserve ISA status. You therefore do not need to take any action at this time.
As soon as any client money and client assets are ready to be returned to you, you should be able to validly transfer your ISAs to another account manager, but only after the joint administrators have quantified all of the assets held by BACSL, and the FCA have authorised the transfer of such assets. Further information will be provided shortly.
On commencement of the new tax year, 6 April 2018, you should be able to open and pay into a new ISA with a different ISA manager subject to your individual circumstances. However, please note nothing in this letter is intended to constitute UK tax or planning advice. It is recommended that you seek independent advice where required.
We will continue to keep clients informed on progress through the website and targeted communications.
Yours faithfully
For and on behalf of the Firms
Russell Downs
Joint Administrator and Joint Special Administrator
Acting as agent of the Firms and without personal liability
Russell Downs, Douglas Nigel Rackham, and Dan Yoram Schwarzmann have been appointed as joint administrators by the High Court to manage the affairs, business and property of Beaufort Securities Limited. Russell Downs, Douglas Nigel Rackham, and Dan Yoram Schwarzmann have also been appointed as joint special administrators by the High Court to manage the affairs, business and property of Beaufort Asset Clearing Services Limited.
The Administrators and Special Administrators act as agents of the companies, without personal liability. All are licensed in the United Kingdom to act as Insolvency Practitioners by the Institute of Chartered Accountants in England and Wales. The Administrators and Special Administrators are bound by the Insolvency Code of Ethics which can be found here.
The Administrators and Special Administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. Personal data will be kept secure and processed only for matters relating to the appointment.
It’s time for Andalas share-holders to get active and demand action and answers from the Board. Genuine share-holders have been lead a merry dance by the likes of CEO David Whitby and the directors. They been have mis-lead and lied too. It is now time for all, regardless of their personal feelings to put away their differences and band together in the spirit of unity to force change.
Everyone involved as a share-holder knows the many,many duplicitious deeds that the Charlatans running Andalas have perpetrated. The dilution, the destruction of share value, the lies, the syphoning off of shareholder cash and not least the so called assets that always vapourise into nothing!
The opportunity is now here for ALL genuine holders to join up, become active and agitate through share-holder activism for change.
If we don’t then there’s a real possibility that Andalas will delist and or go into administration. There’s no cash whatsoever left. They’ve fooked over £5,000,000 of cash. Where has it gone?
It’s with fits of laughter I write on the latest ‘hocus pocus’ now coming out of the beleaguered corporate shysters that are Andalas Energy & Power (LON: ADL). In response to my article this morning they’ve hastily clobbered together an RNS. You can read the bullshit HERE
In that RNS released at 1:32pm this afternoon Andalas confess that ‘Jambi 1 IPP’ is now a ‘Paper Project’. What that means is that it is an ‘idea’ or as I term it a ‘CONcept’. As proven today ‘Jambi 1 IPP’ does not exist in any way shape or form in any Indonesian government department or state run/controlled company! Of course the RNS Clarification is any thing but a ‘Clarification’ where are the costings and the funding?
This from the RNS is very telling:
* Jambi-1 is the name used by Andalas for the project. This is an admission that ‘Jambi 1 IPP’ doesn’t exist other than on paper. Take a bow Neville Chamberlain..
* The “key contractual, technical and financial project milestones to be achieved prior to the consortium making its final investment decision” referred to in the Announcement include: None of the ‘Milestones’ can be achieved as there is NO MONEY
+ completion of the front end engineering and design study: Can’t be paid for without a Placing
+ execution of gas sales and power purchase agreements: Can’t be progressed unless they have $12,500,000-$15,000,000 in the bank
+ execution of an engineering, procurement and construction contract: Can’t be executed as they have to have the funds in-situ
+ contracts for the purchase of the power packs and other equipment: Again can’t be executed as they do not have the funds
+ execution of debt finance agreements: No one is going to give this lot $12M-$15M. So it’s a massive diluted #Placing to keep the lights on
+ execution of operating and maintenance contracts: More pieces of ‘Paper’.. Can’t be executed as all of the above have to be paid
+ licences relating to the facility and transmission lines: Again licenses will not be granted as there is no cash.
* The consortium expects the project to be included in Indonesia’s electricity supply business plan (‘RUPTL’) prior to execution of the power purchase agreement.PLN nominates projects to the RUPTL annually.However, the Minister of Energy and Mineral Resources may direct PLN to include projects on the RUPTL at any time: The ‘CONsortium’ can’t expect the ‘Paper Project’ to be incorporated into the RUPTL as the conditions precedent can’t be foreseen 3-4 years hence. Not forgetting that little bug bear of zippo cash! Hocus Pocus! And none of the above can get onto the RUPTL before 2020 and that’s only if they’ve spent at least $15,000,000. Money they simply do not and never will have.
What todays RNS tells us is that Andalas are about as far away from an IPP as I am from going to the moon in my car and that Cantor Fitzgerald has got them to spell it out in ‘Corporate Speak’ terminology to try to get them off the hook and limit todays damaging expose by Yours Truly.
Make no mistake both AIM and The FCA as well as their Nomad will now be doing there own ‘Due Diligence’ on exactly how this ‘Paper Project’ can advance without financing. That will or should entail making direct contact with all the relevant Indonesian Authorities. Which will be most enlightening.
As for Andalas and their hoards of BB poltroons they’ll be screaming just how super dooper this RNS is and how a CONpany with less that $100k & circa $1,000,000 in liabilities is the best thing since sliced bread. Hey but hang on a ‘Nuttals Momento’ Except the one big fat question that none of them can and wont answer but needs answering.
Today I expose the truly dreadful deceits perpetrated by the well known Aussie’ Shysters Controlling Andalas Energy & Power (LON: ADL). I urge every ADL Muppet, Poltroon and ‘Melt’ as well as Genuine Investors/Traders to read this and take a look at the RUPTL Indonesian National Electricity Plan at the end of this article.
The sooner you all come to terms with the Truth the Better. You have been sold a ‘pup’.
At 8am today a full complaint was lodged with ALL the relevant authorities. The Nomad Cantor Fitzgerald, they of African Potash infamy, have failed once again to pick up on the true situation within ADL. The company are bust and attempting to artificially inflate their SP prior to placing.
Open Letter to Aim Regulation and The Financial Conduct Authority
The Andalas Energy & Power Fraud.
Dear Sir/Madam
I wish to bring to your attention what I believe and documentary evidence as well as Indonesian sources supports, a deception/fraud that is being perpetrated by Andalas Energy & Power (LON: ADL) a London listed Alternative Investment Company. This is very serious.
On the 8th August 2017 Andalas released an RNS to the market and investors that contained material inaccuracies regarding a Jambi 1 Independent Power Plant (IPP) to be constructed in the Indonesian province of Jambi, termed ‘Jambi 1 IPP’.
On investigation by myself and others it is apparent that no ‘Jambi 1 IPP’ exists in Indonesia at any government, national or regional level or within any state-owned company in any way shape or form. In order for one to exist it has to be registered on the RUPTL which is the Indonesian Government National Electricity Plan. A copy of the National Electricity Plan is attached, you’ll note that there is no ‘Jambi 1 IPP’ listed. Indeed, there is no entry on the Regional (Jambi) Electricity Plan which must follow the National Electricity Plan.
There is only one 30 MW IPP listed and that is PAYOSELINCAH which is owned by the state run Electricity company PLN. The date of construction is 2020.
The agreement trumpeted out on 8th August was, like other RNS’s released by Andalas, an attempt to artificially inflate their share price so that they could raise cash. The number of shares traded on 8th August was circa 1,000,000,000, the share price rose some 65%. This also needs to be investigated.
Investors daft enough to have bought stock have been misled in many respects insofar as how an IPP is progressed to its ultimate conclusion. The deliberate omissions of the structure, regulatory and funding requirements of progressing an IPP in Indonesia as well as the inferences of how this agreement would bring value to shareholders and the company is wholesale market abuse. The CEO of Andalas, Whitby, has stated that the construction of ‘Jambi 1 IPP’ can bring in revenues of $10,000,000 per annum for the next 20yrs. This is yet another desperate attempt by Andalas to mislead investors so that they can get away a placing.
RUPTL Indonesian National Electricity Plan up to 2026. Where is ‘Jambi 1 IPP?’
I repeat no ‘Jambi 1 IPP’ exists in any way shape or form on official government registers, national plans or state-owned companies, other than the newly formed small subsidiary PPE which has just started into Upstream Investments. The agreement isn’t with the State-Owned Construction Company, PT PP (Persero) Tbk, it’s with a very and I mean a very small newly formed subsidiary. It has been confirmed to me that Indonesian Due Diligence performed by the ‘Sub’ has only considered that Andalas are a London listed company. That is, it. The subsidiary and the national state-owned construction company as well as Pertamina and PLN the state-owned electricity company, are not aware that Andalas Energy do not have the funds to progress a sweetie shop, let alone 49% of a $25,000,000-$30,000,000 IPP funding requirement.
The progression of the non-existent ‘Jambi 1 IPP’ in Indonesia is wholly dependent on funding. No deal struck with PPE can advance because their partner Andalas Energy has no cash. Andalas must have known this.
At the time of writing ADL have less than £100,000. As well as an outstanding £600,000 loan note that keeps having to be extended at £50,000 per ‘pop’ to keep the holder of the Loan Note, Sandabel Capital, at bay, not to mention the usual costs incurred by an AIM listed company. For any company to enter into an agreement that they do not and never will have the finances to fund is fraud. Andalas are insolvent.
A 49% funding requirement for the ‘project that doesn’t exist’ is $12,500,000- $15,000,000. Money that ADL simply do not have and never will have. Ergo it is a bogus RNS specifically designed, like many other ADL RNS’s, to artificially inflate their share price adding momentum to the SP so that they can raise cash. It is disingenuous and highly misleading for the company to suggest that this is a ‘Value trigger’. Andalas know full well that this is not the case.
The regulatory hoops in Indonesia require a KSO contract with Pertamina as well as a bank guarantee and a down payment to Pertamina. In-order to get the KSO Andalas have to prove that they have their 49% of funds in place. If ADL can’t get a KSO agreement with Pertamina then they have to obtain a Gas Trading Licence from SKKMIGAS to buy gas from Pertamina. Again, proof of funds is needed, as is a gas storage facility costing $2M-$3M. With no funds, they can’t approach Pertamina to buy gas, which again is dependent on proof of their funding as well as a fully funded completed feasibility study. No funding means, no KSO, no deal with Pertamina, no deal with PPE, no deal with PTPP, no gas sales licence and certainly no deal with PLN. That is the stark reality of the situation as of today. Andalas deliberately misled by omission on the above.
Furthermore, if Andalas won the euro millions and were awash with cash and could progress the fantasy that is ‘Jambi 1 IPP’ on passing and jumping through all the hoops the project would then, under Indonesian National laws go out to public tender. That is to say that ADL would then have to openly bid against any and all other companies to secure the rights to the ‘Non-existent Jambi 1 IPP’.
Whitby has stated that ‘The project is expected to qualify for direct appointment (i.e. without public tender) under Regulation No. 11/2017’ this is sheer fantasy and highly misleading as regulation No 11/2017 has four prior conditions which must be met in-order to avoid Public Tender which are thus;
1/ The natural gas price shall not exceed 8% ICP/MMBTU;
2/ The period of the guarantee of availability of natural gas should be equal to the period included in the SPA’s sale and purchase provision;
3/ Power plant investment cost calculation shall be depreciated with a minimum period of 20 years;
4/ Efficiency of the electric power and the specific fuel consumption (SFC) shall be equivalent to a high-speed diesel (HSD) of 0,25 liter/kWh.
None of those four conditions can be extrapolated several years ahead. Especially the natural gas price NOT exceeding 8% ICP/MMBTU. If you could extrapolate this one condition alone with any degree of certainty several years prior you’d be a multi billionaire! The ‘project’ cannot be “expected to qualify”, that is subjective supposition and yet again highly misleading, based on a crystal ball mentality. Andalas must know this and have not declared it.
As for the timeline of 2019, it’s my understanding from very well placed Indonesian sources, that this could not happen in 2019. It would be after 2020 at the very earliest. The reason for this is that it doesn’t exist on the RUPTL and could never get on the RUPTL until at least 2020. Andalas must have known this.
I now turn to the role of the Nominated Advisor (Nomad) Cantor Fitzgerald. Firstly, I must make it clear that I do not seek to apportion blame, merely to assist Cantor in understanding why they failed to pick up on all the above. I believe that just like the shareholders, the Broker and the Loan Note Holder Sandabel Capital, Cantors have been spoon fed misleading information that could only have been discovered by a ‘physical presence’ in Indonesia, Jakarta and Sumatra as well as the correct contacts within the Indonesian oil & gas community. Cantor Fitzgerald are on the whole victims of a complex series of deliberate manipulations.
Nevertheless, you as the regulators need to compel Cantors to explain why their safeguards and due diligence failed to pick up that ‘Jambi 1 IPP’ does not exist and has never existed as well as the deliberate misleading claims by Andalas. The questions are myriad and I do not propose to go through them, suffice it to say that a full in-depth investigation by the Nomad with the appropriate action taken to safeguard not only shareholders but the integrity of the AIM is now warranted.
At the very least Cantor Fitzgerald should make direct contact with the State owned Indonesian companies; Pertamina, PLN, PT PP (Persero) Tbk and their subsidiary PPE to seek clarification. Not least informing each party that Andalas Energy & Power does not have the funds and will never have the funds to build an IPP.
They should also clarify exactly what each company does or does not know about a ‘Jambi 1 IPP’ and what Indonesian regulatory National procedures with finances and timelines required to advance an IPP.
At the same time action needs to be taken to protect stakeholders and shareholders against further “Neville Chamberlain” pieces of paper of which there have been many, promising the earth and delivering nothing, as well as a thorough re-visitation and examination of all past agreements that have never amounted to anything other than failure to deliver, not so much as a ‘Hill of Beans’ but have facilitated highly dilutive capital raisings which have allowed the corporate shysters controlling Andalas to fill their pockets with UK share-holder cash.
My conclusion and opinions on Andalas Energy are well known. What we have here is a bunch of Aussie’ corporate shysters who think they are smart enough to manipulate and fool the Indonesian Authorities as well as the UK London Stock Market using deceptions and highly misleading claims.
Daniel Levi
RUPTL Indonesian National Electricity Plan up to 2026 Where is ‘Jambi 1 IPP?’
It’s looking very bleak at Andalas Energy & Power (LON: ADL) and It’s only going to get worse. I can exclusively reveal that Aim Regulation and their Nomad are investigating the company. Complaints have been lodged and the AIM Regulator is “Taking note” of those complaints! You can read all about some of the fraud by clicking HERE
As I watch their sp tumble towards the yet to be approved placing price of 0.20p, I can’t but help wonder what will happen when/if it goes sub placing price? The news from the city of financial shame, London, is that they will try to readjust the placing price further down! Yes suckers who are provisionally pencilled in for their allotment of stock may get more shares at a marked down price. Rumour is that it could be 0.15p.
I spoke to several sources yesterday one said that phone calls, emails and text messages had been flying back and forth over the last few days between the company, nomad, brokers and the market makers in a desperate attempt to “Hold the line” keep the SP above the 0.20p placing price. Andalas are on “Life Support”. Another had taken calls from known pumpers and dumpers screaming “Blue murder” on how they’d been “Shafted” by the brokers. A completely utter crock of shit. Brokers are their to make money for their clients, whoever they are. If there’s no stomach for a placing at nonsensical prices then they, like every business have to knock the price down. Supply and demand chaps. It doesn’t matter if you think you’ve got gold and tell every mug punter and BBLoon, what counts is what they are prepared to pay. Quite obviously no one was prepared to pay the nonsensical amounts ramped out by the pump and dumpers on social media, ergo you get what you can. The people who “Shafted” retail investors are the Board of Andalas and their pump & dump cheerleaders. We all know who they are!
Under Pressure!
Back to Fraud.
Just quite what has been going on within the company at this present time, one can only hazard an educated guess. But the pressure is now on the bullshitter and fraudster CEO Whitby to explain away (Among other things) why loans of $500,000 he made to himself via the Corsair Singaporean shell were extinguished. Get out of that one Dave and you can take the name ‘Houdini’. With the weight of 2,448,138,803 billion shares around his neck, he is sinking. I don’t think investors in AndalARSE will be seeing Dave for quite some time. Nudge nudge, wink! Wink!
It’s a shocking tale of undeclared, unsecured loans made by Dave Whitby from the coffers of the then CEB AIM listed company, which recently rebranded to Andalas Energy & Power (LON: ADL). Whitby, who is the CEO of Corsair Petroleum, a private Singaporean company, took control of CEB/ADL on June 5th 2015, on that day he also took control of £1,500,000 of placing cash raised at 0.4p. Within days he had secretly signed off $475,000 in undeclared related party payments in unsecured loans. If you think that is shocking, read on and discover who the unsecured loans went to.
I call upon AIM Regulation to immediately investigate Andalas Energy & Power PLC and it’s disgraceful CEO, the $600,000,000 fantasyman Dave Whitby for accounting FRAUDS he should be suspended forthwith! Their Nomad, Cantor Fitzgerald, Miss Sarah Wharry, (Worry) has been informed, as have the AIM Regulation Team and the FCA Market Abuse bods.
This is how it went.
On 10 June 2015 Whitby CEB/ADL issued Whitby/Corsair (Yes himself & his Corsair mates) with an unsecured loan of $250,000. The loan was to bear interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest was to be made by 10 June 2016.
On 15 July 2015 Whitby CEB/ADL issued to Whitby/Corsair another unsecured loan of $225,000. That loan also carried interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest was to be made by 15 July 2016.
Those payments are related party transactions and were never disclosed to shareholders or the market at the time they were made. Just how much of the $475,000 Whitby and Simon Gorringe, who is also on the board of Corsair and the gravy train at Andalas, have taken in payments from Whitby/Corsair is not known. However any payments made by Whitby/Corsair using Whitby CEB/ADL unsecured loan cash must be yet more related party transactions and subject to full RNS disclosure. Nothing, zippo…
The reason Whitby/CEB/ADL gave Whitby/Corsair unsecured loans is quite simple. Corsair haven’t got a pot to piss in and haven’t got any asset/s of value to secure the loans. It is inconceivable that any financial institution or business would advance approx. $500,000 in unsecured loans at 5%.
The questions are many and myriad but will have to wait until later down in this article because folks it gets even worse!
On the 19 August 2015. Whitby/CEB/ADL incorporated a subsidiary of Andalas Energy & Power, another Singaporean company called Corvette Energy (Singapore) PTE. LTD Company registration number 201532252D. Now you would think that an AIM listed company operating on the London Stock Exchange would have RNS’d such. But nay, there’s no mention of the new Whitby/CEB/ADL/Corvette subsidiary. The first inkling of Corvettes existence is six months later, buried in their half yearly report released on 26/01/2016.
Here’s the killer, we learn that Whitby CEB/ADL and Whitby Corsair have now novated and ‘extinguished’ the Whitby CEB/ADL unsecured loans of $500,000 & the 5% interest made to Whitby Corsair. “On 26 January 2016, Andalas, Corsair and Corvette entered into a novation agreement pursuant to which the Loans were extinguished and the benefit of the loaned moneys was transferred to Corvette with effect from 30 October 2015”. So now the unsecured, undeclared loans have come full circle back to Whitby CEB/ADL/Corvette. The burning question shareholders should be asking is this; How much was returned?
Remember, that according to the 2015 annual report the unsecured loans were made with these contractual conditions “The loans bear interest of 5% per annum payable on repayment of the loan/s. Full repayment of the principal amount/s plus accrued interest of 5% will be made by 10 June 2016 and 15 July 2016. There was no mention whatsoever of the unsecured loans being made for Indonesian Due Diligence. It is only when their repayment looms large is it sneaked out that ‘really guys this was for DD’. That throws up a multipule choice of unanswered questions. How were Whitby Corsair ever going to repay? Maybe they were planning to flood the market with the next tranches of ADL shares, all 93,750,000 going to Whitby Corsair that were to be awarded to them on the signing of an Indo’ deal? Did this plan fall apart during suspension? It’s 8 months after the unsecured loans were made that the repayment goalposts are moved. It is s fraud, compounded by lies!
Canada Dry! Charlatan Exposed!
We learn on the 26 January 2016 that they now were given so that Whitby/Corsair could progress Indonesian due diligence. What a crock of shit. Let’s be generous and say Maybe some of the cash was used but I seriously doubt that all of it was! Are we to believe that Whitby CEB/ADL will force their own ANDALAS subsidiary Corvette, to repay back $550,000 to themselves? When did it change? It’s a sleight of hand.No fooker is paying the cash back because the majority of it has been rinsed out by Whitby/Corsair! What is left is probably a small rump of cash that they once again haven’t RNS’d. These are ALL material transactions that have to all intents and purposes been sneaked out via the back door. They have been deliberately withheld. They are in effect ‘Back door Director loans’ that will never be repaid. Whitby should resign immediately.
The elephant in the room is this? Where has $550,000 dollars gone? Of course we’ll get the usual spin from Whitby, does anyone now really doubt that what myself and Tom Winnifrith, have wrote on this chump isn’t, in light of yesterdays absolute disastrous placing and this article today, bang on? Whitby is a corporate crook, raping his own shareholders to line the pockets of himself and his fellow Aussie crims.
I contacted Sarah Wharry the company nomad, from Cantor Fitzgerald, Sarah hasn’t responded to my questions. I wonder why? It has to be noted that Cantor were not the Nomad at the time of the undeclared, unsecured related party loans. That mantel fell to Sanlam Securities who, intriguingly, no longer provide Nomad services! I personally spoke to several big private holders of ADL stock who were again, unaware. I spoke to two CEO’s. One stated that he “would never put that to my board because it was wrong”. The other said in answer to my question, are these in your opinion related party transactions? Reply; “Absolutely – is a related party transaction and needs independent written advice and an RNS”. Both of these men are respected CEO’s.
I urge shareholders to contact the relevant authorities with the questions below. Make a formal complaint. A full investigation is warranted. Get the $550,000 dollars back. A full forensic account is needed here!
Questions for AIM Regulation, Cantor Fitzgerald and the FCA Market Abuse Team.
1/ Can you please explain why $475,000 in related party payments i.e Unsecured loans, made by the CEO Whitby CEB/ADL to CEO Whitby/Corsair were not disclosed to shareholders and the market at the time they were signed off? (There was never any RNS’s)
2/ Can you please investigate how much of the unsecured loans made by Whitby/CEB/ADL to Whitby/Corsair were paid in fees/expenses to Whitby/Gorringe by Whitby/Corsair?
3/ I understand that these unsecured loans have now, as of January 2016, been novated and moved into a hastily incorporated subsidiary of ADL. (Corvette) why wasn’t this disclosed?
4/ How much money was transferred by Whitby/Corsair to the Whitby ADL subsidiary Corvette?
5/ How much cash did Whitby/Corsair burn through before the residual amount of the unsecured loan was transferred back to the Andalas subsidiary Corvette?
6/ What has happened to these loans now, will they ever be paid back in full as per Whitby stated in the 2015 annual accounts?
7/ The Company has lied to shareholders and the market, isn’t this sanctionable?
8/ Why was there no RNS on the formation of the ADL subsidiary, Corvette? Surly this is an RNSable event?
9/ Why was there no RNS on the transfer of the loans back from Whitby/Corsair to the Whitby Andalas subsidiary, Corvette?
10/ Why wasn’t the novation and extinguishing of the loans plus interest, disclosed to the market and shareholders?
11/ How much of the unsecured loan cash went into the pockets of Whitby/Gorringe/Corsair?
12/ Why was no information ever given to the market that unsecured loans with 5% interest, were part of a due diligence effort?
And last but not least,
13/ Who signed these unsecured loans off and where was the oversight with the written legal advice as to their legality?
It is only in January 2016 some 8 months later, that we are told that; Andalas and Corsair agreed to structure the funding of the due diligence expenditures as loans (“Loans”) to Corsair” This just isn’t credible let alone believable.
It seems to me that this is, to all intents and purposes a fleecing of CEB/ADL cash by the executive and should be immediately investigated.
I put it to shareholders that these unsecured undeclared loans were in effect ‘back door director loans’ which have now been rinsed through two corporate entities coming back to ADL’s Corvette subsidiary minus a large amount of cash originally given to Whitby/Corsair by Whitby CEB/ADL.
Basically chaps where has all the money gone?
Viva
Dan
NB. This is what they said in their annual accounts: Published 21 July 2015;
On 5 June 2015 David Whitby was appointed as Managing Director and Chief Executive Officer of the Company. David Whitby is a beneficial owner of Corsair. Through his beneficial ownership of Corsair David Whitby owns 7,812,500 shares in the Company which were issued on 4 June 2015. On 10 June 2015 the Company entered into a loan agreement with Corsair to provide Corsair with an unsecured loan of USD 250,000. The loan bears interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest will be made by 10 June 2016.
On 11 June 2015 370,000,000 ordinary shares were issued for trading at a price of 0.4 pence per share, raising gross proceeds of GBP 1,500,000. Of these 50,000,000 were subscribed to by Northcote.
On 15 July 2015 the Company entered into a loan agreement with Corsair to provide Corsair with an unsecured loan of USD 225,000. The loan bears interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest will be made by 15 July 2016.
This is what they said in their 2016 half yearly report: Published 26 Jan 2016;
On 5 June 2015, Andalas and Corsair entered into an agreement (“Assignment”) pursuant to which Andalas agreed, amongst other things, to undertake and fund due diligence in respect of certain oil and gas concessions in Indonesia with a view to making an investment. Initially, for administrative convenience, Andalas and Corsair agreed to structure the funding of the due diligence expenditures as loans (“Loans”) to Corsair and, accordingly, advances pursuant to that arrangement were made on 8 May (US$25,000), 10 June (US$250,000) and 15 July 2015 (US$225,000). On 19 August 2015, Andalas incorporated a subsidiary, Corvette Energy (Singapore) Pte Ltd (“Corvette”). On 26 January 2016, Andalas, Corsair and Corvette entered into a novation agreement pursuant to which the Loans were extinguished and the benefit of the loaned moneys was transferred to Corvette with effect from 30 October 2015.
Corvette was incorporated on 19 August 2015. There was never any mention in the 2015 accounts of Corvette etc Or what these unsecured loans were made for?!?
Corvette only comes into the picture when the repayment of the loans with interest begins to loom large.
