Investigators leading the inquiry into Langbar International are looking into links between the fraud at what was once AIM's biggest cash shell and the collapse of a Canadian hedge fund. Small Talk has learned that both the corporate recovery team which now runs Langbar and the Serious Fraud Office (SFO) which is investigating the fraud at the company are following leads that connect it to Portus Alternative Asset Management.
Any link between the two is likely to make the work of the investigators at Langbar significantly more complicated and time consuming than originally thought. Portus, which at one point held more than $750m on behalf of 26,000 investors, stands accused of illegally diverting more than $87m. The Toronto-based hedge fund was founded four years ago by Boaz Manor and Michael Mendelson and quickly became one of Canada's fastest growing asset managers. In February last year, things started to fall apart when local regulators prohibited the hedge fund from trading securities. Soon after that, KPMG was appointed as receiver to Portus and the police were called in. As with Langbar, the receivers found it difficult to locate investors' money.
Until now, Jean-Pierre Regli, a Swiss banker from Lugano who also served on the board of Langbar until the tail end of last year, has been the only known link between the cash shell and the Canadian hedge fund. In September, he was interviewed by Italian prosecutors looking into how money from Portus had ended up in local bank accounts.
Langbar, headed by the recovery expert David Buchler, is pursuing Mr Regli and fellow founders of the company Mariusz Rybak and Abraham Arad Hochman, claiming damages for deceit, conspiracy to defraud and for breach of fiduciary duties. Mr Buchler is charged with getting back as much as possible from Langbar's missing money for the benefit of its shareholders. It is up to the SFO to prosecute those behind the fraud at the company.
Proactis in profit
Proactis, which develops software that helps organisations to control their expenditure, joins AIM on Thursday. The York-based group will raise about £4m from the float, valuing it at more than £13m. Despite its small market value, Proactis already boasts 70 organisations throughout the country as clients including HMV, Wickes, and Amnesty International. In the first eight months of its current financial year, Proactis has already made £252,000 before tax.
Proteome cash crunch
Proteome Sciences shares soared almost 40 per cent last week after the biotech unveiled a licensing deal for its technology with BioMerieux. Proteome develops systems to analyse proteins, their role in diseases and potential therapies. Last week's deal focused on detecting and diagnosing strokes. So far, so good. But the company failed to publish one key piece of information. How much is it going to make from the tie-up with BioMerieux? Without this figure, it is impossible to gauge how significant the deal is for the company.
Proteome is not a company that can afford to spend time on entering into alliances that do not generate revenue. The group faces a serious cash crunch. Jonathan Senior, an analyst at Evolution Securities, believes it could run out of money next month, although he does admit that by cutting back on working capital and extra borrowing this timeframe could be extended by a few months. Proteome has two options. Either it secures some major licensing agreements that generate big revenues in the next few months or it goes cap in hand to the City in search of yet more equity funding.
Merchant's pot is boiling
The Australian café chain The Merchant Group is targeting the UK as part of the first phase of an international expansion drive. With the aim of raising its profile in this country, the group will list on Ofex this week. Merchant is self-financing its expansion drive and will not raise any new money. It expects to see its shares admitted to the lightly regulated exchange at a price of 7.25p, giving it a market capitalisation of £22m.
Established in Perth, Western Australia, in 1990, Merchant has made a name for itself as a café for tea and coffee connoisseurs. Its outlets are colonial in feel and focus on selling the best quality teas, coffees and complementary foods from around the world. It has opened seven cafés in Australia but wants to have 24 up and running on a franchise basis by December 2008 - 17 in Australia and 7 in the UK. The group already has in place internal systems to support franchisees and promote the Merchant brand.
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