The listing of Umuthi has been a debacle of note, raising questions about the due diligence conducted by the LSE listing authorities and about the alleged illegal touting of shares in South Africa.

Colonel Andre Traut, the Western Cape police media officer, confirmed that Tony McKeever had been arrested last Friday and appeared in court on Monday on a fraud charge. Bail was granted. 

McKeever’s arrest follows the arrest of both the CEO of the company, Gert Viljoen, and a one-time listings officer, Connie van Nieuwkerk, in October 2021. Charges against Viljoen were subsequently dropped, but Van Nieuwkerk, also known as Van Vliet, remains in custody. 

A very active group of former and current shareholders in the company claim that McKeever and Van Nieuwkerk sold shares prior to the listing which were subsequently not formally registered when the listing took place, suggesting that they pocketed the money. 

In total, about 25 million shares are at issue in the case, theoretically owned by 48 people. When the company was listed, 102 million shares, excluding the 25 million in dispute, were officially registered, suggesting that about a fifth of the shares issued may have been issued fraudulently.

Meanwhile, the company has recently been in contact with shareholders, putting out a statement on Friday last week on the London Stock Exchange news service.

The statement noted recent events and informed shareholders that there were “additional Shareholder concerns as regards external share exchange agreements entered into prior to the Company’s listing”.

“The Board of the Company has obtained legal advice on the issues raised by shareholders and will shortly be discussing its conclusions with interested parties, including the FCA. Based on the legal advice obtained, the Board is of the view that the concerns raised relate to third-party over-the-counter share transactions between private individuals and do not involve the Company or its Directors.”

The statement acknowledged that while “there may be claims against the individuals with whom these participants transacted that misrepresented the number of shares that would be acquired, it is the Company’s considered view that no claim against the Company would succeed as the individuals concerned, whether purported buyers or sellers, acted personally and without the Company’s knowledge and that there is accordingly no entitlement to additional shares”.

The statement also noted that it was “undergoing a management restructuring” and was “working on its business plan which will establish the strategy for future operations”.

It said that Colin Bloom had resigned as non-executive director, a potentially serious concern for the group since London listings require at least one UK-based director. “The Board of Directors is currently seeking a suitably experienced UK-based replacement to take the restructured business forward upon restoration of the listing.”

The company remains suspended and the statement provided no indication of when that might occur. BM/DM