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I don't know Ports but they must have known late Jan when GT gave notice of their resignation that they were in very serious trouble. They must have been looking at the consequences of that both business wise and on the AIM. It looks like they are completely hamstrung by the corporate governance problems. We can only wait but I would think that any enhanced shareholder value is a long, long way off. It's looking like like one of those situations when I know bad news is coming and I just want to be told as soon as possible to put me out of my misery. !!
Probably the case Pianista. The audit community will be fully aware of the scenario surrounding DX.
Sister, I don't see any opportunities for a " cunning plan".
If we trade on the OTC, I can't see the interest being there. The ii's aren't going to get a price that they'll be happy with and they'll have a problem getting rid of that many shares.
The best hope at this moment in time is a AIM extension.
As you say the the Corporate Governance issue and Audit issue will need will to be concluded before we see anything positive.
Dx have dug themselves a very big hole.
Ports - I see that this case, involving DX’s previous auditor KPMG, was to do with bribery (despite which the auditor didn’t find it necessary to resign). There’s an amusing irony in the fact that to avoid prosecution for bribes RR effectively paid a “bribe” to the authorities. Perhaps DX could do the same, if applicable!?
Apart from the FRC now reminding auditors to be “alive to the risks of companies’ non-compliance with laws and regulations…”, GT will have been extra careful anyway in its dealings with DX after having had its knuckles rapped over Patisserie Valerie.
Add to that, the fact that after decades of consolidation, the number of audit firms large enough to take on a client like DX has diminished, and that there are resource issues in the audit profession generally following Covid, and we have a perfect storm.
In contrast, in normal times, the governance issue at DX would probably not have turned into the crisis it has become. Audit firms have been glossing over these sorts of issue all the time, so it’s ironic, and rather hypocritical of them, if they are now turning their nose up at DX! GT must be ****ging off DX to prospective auditors something rotten.
Interesting that KPMG have been fined over 3m for failing to address matters in the audit which indicated a risk on non compliance with laws and regs with Rolls Royce. Perhaps any potential auditors are petrified of the FRC and any comeback if they get involved with DX who obviously have a dark cloud over them.
Pianista is right about the Auditor issue. It's worth recapping on the contents of GT's letter and Ron Series reply. Ron Series stated that the audit cannot be concluded because the corporate governance inquiry has not been completed. Ron said it remains focussed on concluding the enquiry as soon as possible. So presumably that still stands.
The last RNS made no mention of the corporate governance inquiry and that is very concerning in itself. Is it still going on, who is leading it.I don't think it is still going on and at the risk of repeating myself it is my feeling that this has moved on to become a legal (perhaps criminal matter) which could take months or over a year to sort out.
Day to Day though Dx have to live with that until it reaches a conclusion but it will end at some point... somehow.
They have to focus what is best for the business moving forward and it would seem to me that being forced off the AIM all things considered is the least desirable option.
You'd be lucky to get 10p on the OTC at the moment, so I'm not even thinking about that. If you don't need the money, best wait...
Yes that's right, but life goes on and DX shares will have to be traded on the OTC and the fact that DX have still failed to appoint an auditor which I agree is a huge problem will continue to contribute the negligible interest and probable value of DX stock wherever it is traded.
The main thing on my mind is not so much the threat of delisting, but the ongoing difficulty they’re having finding an auditor, because that appointment is the key to unlocking this conundrum, and something no company can do without, whether listed or not.
Any talk about what may happen to the company in the future is academic until this is resolved.
But it increasingly looks like that will not happen until they make whatever management changes, however unpalatable, are demanded of them.
The next few RNSs should make fascinating reading.
Yes, and if we do trade on the OTC who is going to be interested in shares in a company that has been kicked off the stock market. We'll be lucky to find a buyer !!
Surely there is a " cunning plan"!
It's very hard to believe that we are just six weeks away from the ignominy of being booted of the AIM. If there is a strategy to relist at some point it can't be a sensible strategy.. the embarrassment will be a millstone around their necks.
Although I think it is to late now... a voluntary delisting would have been a far better option.. but perhaps they sounded out the II's and don't have the support....... perhaps they don't have an agreed alternative.
If they delist , I don't think there is the slightest chance DX will apply to relist in its current form.
We private investors have certainly been put through the wringer. !!
I take Pianistas point that there is no reason why the two NED's couldn't head the CG inquiry. But I also sympathise with Sister as regards a conflict of interest and I can understand that view. The investigation and inquiry is subject to privilege so we are never going to find out but the DX statement that the inquiry was not being expedited as quickly as hoped does indicate a bit of breakdown between the NED's and the executive board and that's real shame. I have no doubt that they did resign dismayed at the approach of the people responsible for the day to day operations.
I continue to be amazed by DX's silence. It is now 6 weeks away from a forced delist. If there are other things a foot it really must be going right down to the wire.
No need to apologies .It doest matter. I just have a different view. The corporate governance issue could have started any time after July 2020 but we have no idea when. The Ned's were in post then and they would have been fully aware of the issue and more than likely gave their advice, expertise at the time to the day to day management team.Subsequently they are given the lead of the corporate governance inquiry so presumably they are looking into their own advice.
I get the detail and the theory but in the real world how can people be truly Independent when they are shareholders and being paid by the company they are investigating. Does this account from the perceived unhelpfulness towards GT. GT have made damming accusations so who is at fault.. the NED's who DX seem to have blamed. Likely Story. !!
Why should they who are independent from day to day ops take the rap. !!.
The directors of Dx have brought this company from a successful turnaround now in profit to a very uncertain future. I for one can't understand why no-one who is responsible for it hasn't fallen on their sword.
Sister, sorry I wasn't trying to teach you to suck eggs re directors' obligations! But note, the general behaviour of directors on AIM is another issue. I'm saying that only the NEDs are independent of management, or supposed to be, so it was correct in this case for them to head the investigation. As Pianista says, the auditors actually do the marking. That's my understanding.
The two NEDs were the Audit Committee, so I think, without knowing the full story, it was entirely appropriate for them to investigate. They weren’t marking their own homework though - that was the job of the external auditors, who came along afterwards to check, or to try and check, their work.
It’s now 15 days - though feels like 15 years - since we were told they were in urgent discussions with potential new auditors...
I think we all know what the responsibilities of directors are both exec or non exec. If they all behaved in the manner they are supposed to we wouldn't have half the issues and business failures we do especially on the AIM.
Let me make a distinction about directors' responsibilities. All director's are legally obliged to act in the best interests of the company and within the law, etc, but as for being independent of the management, clearly the executive directors cannot be independent of themselves.... This is where the NEDs come in.
Could be... but DX investigating DX in what is obviously a major problem was never going to end well. !
"The two NED's were in post thought the period all this was going on( 20/21) so effectively they are marking their own homework."
Isn't it more likely that the NEDs submitted their homework to the BOD for marking but the other directors didn't like it and wouldn't apply the NEDs' recommendations? If the NEDs felt strongly about the matter they would probably resign, wouldn't they?
"There is an assumption here that the BOD WANT to avoid a delisting." (ATPM).
There’s no point in engineering a forced delisting. No shareholder, including IIs with huge amounts stake, would want that, so they’d simply reverse it by forcing a relisting, assuming DX do eventually find an auditor.
Furthermore, you can turn your back on AIM, but not on the Registrar of Companies, who will ultimately disqualify the directors if audited accounts remain outstanding. HMRC are also being kept waiting….
Meidar might be wishing he hadn’t managed to muscle his way onto the BOD!
The point I was making was that Ian Gray and Paul Cookson (NED's)were leading the corporate governance inquiry presumably appointed by DX. DX then say that the inquiry was not progressing expediently as initially hoped and they "resigned". GT then prattle on about un -helpfulness, access to documents, potential breaches of law, privilege etc.etc The two NED's were in post thought the period all this was going on( 20/21) so effectively they are marking their own homework. The theory is fine.....but in practice !
"No, NEDs are *legally obliged* to provide *independent* oversight of the management."
This only applies to the same extent as for any director. The Companies Act does not distinguish between executive and non-executive directors and all directors have a duty to exercise independent judgement.
"It's like investigating your own actions".
No, NEDs are *legally obliged* to provide *independent* oversight of the management.
Theoretically!
I don't think there are any assumptions on here like that. People just give their opinion on what they think might happen, could happen and what options there are. DX aren't telling us anything apart from stating the obvious so that is all we can do.
There is an assumption here that the BOD WANT to avoid a delisting.
One of my other investments was caught making "questionable payments" about 5 years ago. The SFO got involved, and their investigation is still ongoing. The auditor never resigned. The business and the shares are currently on a high.
DX's situation must be different in some important respect. Maybe it was just the lack, or perceived lack, of cooperation with GT, and this ended up being the final straw in their allegedly strained relationship.