Member Info for Pianista

As regards share options, I believe LD has 43m outstanding, and that other employees have tens of millions between them. What happens to those? I doubt if the rules of the share option scheme envisaged the company becoming delisted. And if unlisted, how do you determine the proportion that vest, which is based on the quoted SP? Assuming you get over that hurdle, you’d then have the problem of finding a buyer for your shares, which furthermore will be heavily discounted for being unlisted. LD may be relaxed about all that - assuming he escapes disqualification as a director for failing to file accounts - but will everyone else be? I wouldn’t be, if I were an employee. They may try to compensate employees in other ways, but if they need shareholder approval for whatever they come up with, they can hardly expect a sympathetic ear after all that’s happened.

Logic dictates that they avoid all the complications and stick to finding an auditor. My only doubt is whether logic really applies any more…

ATPM - just seen your post. On the auditor point, I see you still maintain they aren't being open about the CG issue for fear of it it becoming public knowledge; so they aren't actually trying very hard to appoint an auditor at the moment, it's all a pretence.

As I've explained in previous posts, as regards disclosure, it makes no difference whether they are listed or unlisted.

As regards the RNS telling us that they are still in discussions with potential auditors, it's just not credible that it's all a sham. This would require collusion with the NOMAD, because they'll know ALL the relevant facts by now, including what the company needs to do to get an auditor, and they couldn't possibly allow a grossly misleading RNS to go out.

LD has 63m shares worth £19,000,000 at 30p (and that’s not counting share options).

That alone should be incentive enough to do whatever it takes to keep the company listed, you’d think.

Ports - as long as it isn’t an RNS on 5/7/22 drily announcing “We haven’t yet appointed an auditor. We are still in discussions. We will update you further in due course”!

But, even after Meidar muscling his way onto the board after complaining of the company’s abysmal communications, I wouldn’t put it past them.

Let’s hope they see sense and put this to bed.

In theory, the IIs know no more than anyone else. However, in practice, they’ll have had more out of the board than us, but they’ve no doubt been reassured that an auditor will soon be appointed and a delisting avoided.

Up till now, I think this has been sufficient to stave off an II revolt, which in any case has become more complicated to arrange, now that the joint largest and most activist II, Gatemore - which lavished so much (premature?) praise on management in its open letter to the company - is also an insider.

However, if the appointment of an auditor doesn’t happen, the **** will surely hit the fan.

Ports - if GT’s extremely damaging allegations were unjustified, you’d expect them to be vigorously challenged, starting with at least a complaint to the ICAEW.

Instead, all we’ve had is a worryingly weak rebuttal, followed by four months of silence.

If there really is no need for further resignations, it’s time they showed it by making a strong, meaningful rebuttal. If not, they need to get on with it, and clear the way for an auditor to be appointed.

The company has obviously got itself into a tight corner under Lloyd Dunn’s leadership, so I must admit the possibility of his stepping down as CEO has crossed my mind. Whether that would be the right thing to do is impossible to judge without knowing the details behind the governance issue. But hopefully the company have paid due attention to succession planning, and have sufficient strength in depth, so that if it did happen it would only be a temporary setback.

God only knows what’s keeping them, but even at this late stage there is still time to retrieve the situation. (If the problem finding an auditor were insoluble the NOMAD would have resigned, which really would be a blow).

Ports - to be honest, I’m not sure I understand your post. And neither of us understands what’s going on behind the scenes, although we can guess.

For me, though, the bottom line is that it does look like DX will need to radically move its position, however traumatic that may be, and with delisting looming, it’s better to bite the bullet now than in 6 months’ time.

God save Trak PIs!

Ports - “If there was that desire by the current board and majority shareholders to do [a voluntary delist] why hasn't it been done by now when perception of it would have been far more favourable than a forced delist.”

I think because a voluntary delist at this stage could not hide the fact that you were still without an auditor and about to be forcibly delisted anyway, so would do nothing to avoid the bad publicity.

But they’ll have to do whatever is necessary to appoint an auditor sooner or later, so why not do that now, and avoid a delist? It’s a no-brainer. As a shareholder, Meidar will be thinking the same, the difference being that as a director he can actually do something about it, whilst suffering reputational damage if it doesn’t happen. In this respect, we are fortunate in having him on the board.

So I think it’s inconceivable an auditor won’t be appointed this month. We’ll still need an AIM extension, but I’d be less worried about that, as long as we do find that all-important auditor.

Good but old news (see my post exactly one month ago!). SP won't respond till it's good and ready!

ATPM – Basically, yes. Generally, there is no requirement for, or advantage to, an auditor to make public a breach, or potential breach, of the law.

His primary concern is to ensure that there is proper disclosure in the accounts, if necessary qualifying the audit report.

If it were, exceptionally, in the public interest for the whole world to know, it would be no more so if the company were listed than if it were unlisted. (Many large unlisted companies for example have more dealings with the public than listed).

“If DX DO talk through the detail, the auditor will most likely then document this, thus, the detail becomes public and DX will no doubt have to make a statement”. (ATPM).

The auditor will without doubt document everything discussed, but it won’t become public. DX may not have told GT everything, but what they have told GT has not become public. GT are bound by confidentiality, so how does it become public?

ATPM – to answer your reply to my last post, you’re point seems to be about the DETAIL of the CG issue.

You say “[Being a private company would not] require DX to issue any public statement so as to remain transparent.”
However, echoing one of Sister’s points, DX is listed and that hasn’t in fact stopped the company from keeping the details out of the public domain. (But that’s not surprising: the obligation to tell GT everything relevant to the issue doesn’t necessarily mean the whole world has to know all the details as well).

If DX were unlisted, the same would apply – we’d again know nothing about the detail.

So there is no difference between being listed and unlisted in this respect.

Sorry, that should be ATPM, not APTM.

APTM - there is no advantage in being "private" in terms of preserving confidentiality over the reasons for an auditor's resignation.

An auditor’s letter of resignation, setting out “the reasons”, must be filed at Companies House whether the company is listed or not.

So “the reasons” are always in the public domain, and being unlisted is of no help to management in this respect.

On reflection, do you agree?

"An auditors responsibilities don't change because it's not on the AIM." - Sister

Correct. So DX will find it just as difficult to appoint an auditor if they become unlisted.

Delisting is not a get out of jail free card, and I'm sure they know this full well. It's the opposite actually, because it would lay them open to claims from aggrieved shareholders for damages ultimately caused by mismanagement. Best focus their attention on finding an auditor. A voluntary delisting can always, if relevant, be considered some time in the future, after proper consultation with the shareholders.

ATPM – I’m not sure why you don’t believe they cannot get an auditor (i.e. it's all a pretence? ). The fact is they haven't appointed one, and to any normal director, that would be a complete disaster. It’s unheard of.

If that failure then leads to delisting, that would compound the disaster: the value of the shares would be crucified, if you could access any value at all. So delisting is in no shareholder’s interest.

If DX were unlisted, specifically what sort of information about the CG issue would they be exempt from providing in the accounts? ( I don’t think there’s any exemption, hence no advantage in being unlisted on that score).

Gatemore have gone quiet because their hands tied, because they are also a director. That’s all there is to it.

I believe the problem for DX at the moment is no more complicated than this: prospective auditors are insisting on wholesale changes at the top; the company are resisting making such changes. Eventually, soon, something will have to give…

email - with the 5/7 deadline looming, I’m sure they are at last pulling out all the stops.

And there probably are limits to what they can tell us (either to protect the company or to protect themselves, the BOD).

However they were very slow to tell us about the extreme difficulty they’ve been having in finding an auditor. They probably could have told us that at least a month before they eventually RNS’d us on 10 May.

There is also a contradiction in what they’ve already told us. Namely, they told us that GT’s allegations were basically incorrect, which gave the impression it wouldn’t be difficult to find a new auditor; however it’s fairly obvious now that GT’s comments are the reason why it’s proved impossible so far to find a new auditor, so it looks like DX’s rebuttal was as weak as it sounded.

This all leaves the impression of poor communication and incompetence, I’m afraid. Despite that, I haven’t completely lost hope that they’ll find a way through.

It’s not only the endless silence from the company that I find puzzling and disappointing, but the silence from IIs such as Hargreave Hale and Schroders, whose patience, like ours, must have been tested to the limit by now.

Why haven’t any of them requisitioned a shareholders’ meeting to hold the board's feet to the fire, and to discuss what could/should be done about the current predicament? The most activist II, Gatemore, is unfortunately already on the board, which probably makes it more problematical for them to stir things up in this way.