Currently viewing Global edition

Bushveld fined £490k for breaking AIM rules

The London Stock Exchange has fined Bushveld Minerals (AIM:BMN) £490,000 (US$624,000) for not telling the market it had signed an exclusivity agreement to buy the Vametco mine in 2016.
Bushveld fined £490k for breaking AIM rules Bushveld fined £490k for breaking AIM rules Bushveld fined £490k for breaking AIM rules Bushveld fined £490k for breaking AIM rules Bushveld fined £490k for breaking AIM rules

The LSE has fined Bushveld for breaking AIM rules 11 and 31

The miner, which has been one the biggest risers on the AIM market of the past two years, said its governance standards had fallen behind its dealmaking abilities at the time. 

It also admitted to trying to avoid suspension under the reverse takeover rules to "protect the economics of shareholders". 

The LSE said management ignored advice from its nominated adviser Strand Hanson over disclosing a "material" US$500,000 exclusivity fee to the Vametco seller, Evraz, on March 26, 2016. 

"The nominated adviser explicitly advised the company on its disclosure obligations, prior to the company authorising the giving of the undertaking," the LSE said in its disciplinary notice.

"The company disagreed with the nominated adviser and sought separate advice from its lawyers on its AIM Rules disclosure obligations."

The LSE said Bushveld was trying to avoid suspension, which would have been required as buying Vametco was officially a reverse takeover.

The suspension did happen but only from April 21.

Bushveld effectively told shareholders and regulators on April 22 it had failed to disclose the exclusivity fee in an announcement that dated the deal period from March 24.

Bushveld chairman Ian Watson, who was in that role at the time, said the company ignored its Nomad's advice to keep the share price higher.

"The company's actions were informed by an intent to protect the economics of its shareholders and avoid unnecessary dilution, in a transaction it saw as transformational," he said.

"However, the company acknowledges that if it had engaged more fully with its nominated adviser as required under the AIM Rules, it could have met its regulatory obligations whilst also meeting its commercial objectives and the company regrets the consequent breaches of the AIM Rules."

CEO Fortune Mojapelo said the company would not repeat the AIM rule breaches.

SP Angel has now taken over as Nomad. 

The LSE's initial fine was £700,000 but Bushveld bought this down to £490,000 for early settlement.

As of June 30, the company had £26.2 million in cash.

Bushveld's share price was down 1.2% on the news to 41.5p per share.