Lies, Damned Lies and Winnifrith Analysis

The following are some excellent examples of how Tom Winnifrith’s lying and scheming is considerably worse than anything he accuses his short-selling targets of doing.

 

On June 6^th he wrote: ‘I have today received a letter from the Financial Reporting Council about a complaint I made about the uber dodgy accounts of drowning in debt heading for insolvency Avanti Communications (AVN). You will remember that Avanti did 2 transactions which generated cash in of nil and cash out of $14 million and booked that as a sale of $25 million on a 100% EBITDA margin.

I argued that this was misleading. Avanti defended its case and has managed to avoid having to restate. However, as the letter from the FRC makes clear it was forced to make changes to the way it presents the matter in its accounts and also to disclose management assumptions which underly this "profit" booking. When those are shown to be ludicrous by events that will be the rope to hang the bombastic prick of a CEO David Williams and his board.

This is not the total victory I had hoped for but in forcing Avanti to change the way it presents this strange transaction it is a win none the less. And it is now the third win I have had with crap AIM companies and the FRC (Eden Research and Quindell being the others).

Once again the FRC thanks me for my efforts. To certain pious share bloggers who have never had any such victories but claim to be pure as the driven snow and question my ethics and what it is I do, I say "fuck you."

As for Avanti, good companies are not forced to represent their accounts by the FRC. My target price remains 0p.’

 

In fact, the FRC says quite clearly that they found nothing untoward.  It does not say that the accounts had to be represented…they didn’t. 

Avanti didn’t have to make changes.  The management assumptions were fully disclosed in the 2015 accounts, but Winnifrith just ignored them.

For two years he has said Avanti was under investigation.  He was lying. As the FRC said ‘the matters you raised are not being pursued further’.

 

On June 11^th he wrote: ‘I reflected upon this and then on Avanti Communications (AVN). Again I got another little win last week with the FRC forcing the company to change the way it presents its accounts.’

(Lie…they weren’t forced to do anything)

‘But really what has changed? This company was launched with CEO David Williams faking a product demonstration to investors. That is fraud.’

 

Another lie, of which he is very well aware. This was a meta-test demonstration to a customer, explaining how kit that had not yet been launched would work in the future.  The customer signed up, the satellite was launched. The customer paid.

 

On June 14^th: ‘It is not a matter of IF drowning in debt satellites company Avanti Communications (AVN) will eventually see a 100% shareholder wipeout ( right now it is c99%) but WHEN. And it might be rather sooner than most folks think. In two weeks time to be exact..

The headline of the 20th December RNS was economical. It trumpeted a $242 million refinancing. Most people probably thought this was a great result. But dig in 2 layers, and it's not nearly as good as the spin suggests.

Layer 1: of the headline $242 million, $112 million is interest deferral - so not actual cash to pay for things like building satellites, launching satellites or funding … just not having to pay cash out in the future to the bondholders.

Layer 2: This is where things are interesting; Williams proclaimed $130 million of new cash funding. However, this was split $80 million upfront but the remaining $50 million was due in two tranches of up to $15 million on 30th June 2017 and $35 million on 30th November. But it's only on page 4, after screeds of repetition and the 4th time that the $50 million is mentioned that you discover that these payments are not certain. In fact, they are:

"subject to certain conditions being satisfied on the draw down dates, including there having been no default in respect of any indebtedness of the Company and no material adverse change having occurred."

So what are these "certain conditions" and have they been met or is there the prospect that Avanti won't receive its cash on 30th June? I think the company should tell its long suffering shareholders.....’

 

Two days later Avanti told investors that the conditions had been met or waived and the company would receive the $50m and another $50m on top.

But Loserfrith was so cross he chose to report this differently, as follows.

 

On June 19^th: ‘You are drowning in debt so what to do? In this crazy world you take on more debt! and so Avanti Communications (AVN) today announced that it had secured a new $100 million debt facility. Read carefully and you will see what an absolute nightmare this news is.

Avanti states that it has "entered into a facility agreement with HPS1 which will provide a $100 million three-year super senior facility (the "Super Senior Facility"). The proceeds from the Super Senior Facility replaces an existing undrawn higher cost $50 million debt facility and provides $50m additional new liquidity and will be used to complete the construction and launch of the Company's HYLAS 4 satellite and, subject to certain conditions, may be used to redeem or repurchase some of the Company's outstanding high yield notes. The interest rate is 7.5% p.a, versus a rate of over 10% p.a. on the facility that is being replaced.

In order to incur the Super Senior Facility, the Company has received sufficient consents from holders of its outstanding notes to certain amendments to the indentures governing the notes and the intercreditor agreement, including amendments to the EBITDA financial covenant such that the first testing date is to be moved from 30 June 2017 to 31 March 2018 and the thresholds are to be lowered.

The Super Senior Facility will close upon execution of the necessary documents which the Company expects to occur on or around 21 June 2017. Upon the incurrence of the Super Senior Facility, the Company will cancel all outstanding commitments for holders of its 2021 PIK Toggle Notes to purchase delayed draw notes on 30 June 2017 and 30 November 2017.

But before the bombastic prick of a CEO David Williams gets too excited I make three points.

1. HCL states that it provides "non investment grade" debt, that is to say junk bonds. If the bonds are classified thus that truly makes the equity worthless.’

 

Lots of companies issue non-investment grade bonds.

 

‘2. We were told in December 2016 that the refinancing announced then ( i.e more debt) fully funded the company - it's even in the headline of the press release. In today's RNS we're being told that the additional liquidity that's being raised "will be used to complete the construction and launch of the Company's HYLAS 4 satellite"

So was the original RNS misleading or is the company performing si far below forecast just six months later that it desperately needs more cash? Or both.’

 

Funny, because earlier Tom Tit said the liquidity wasn’t going to be available. Now it’s confirmed that it is…and the company is “fully funded”.

 

‘3. The EBITDA Covenant has been pushed back from 30 June 2017 to March 2018. There was an EBITDA Covenant at June 2017? Really. That is the first time that has been mentioned. Shareholders should have been told about this as it's blindingly obvious to everyone that Avanti was not going to make this covenant test.’

ALL debt issues have covenants and virtually all of them are EBITDA covenants.  What’s TW’s evidence that Avanti didn’t pass the last covenant test? It has just secured funding at a materially lower rate, after all. One must assume that the new lender was happy with the covenants

 

‘And also the thresholds are going to be lower. So in the 6 months since the refinancing, business has gone so badly that they've pushed the covenant test back by 9 months!’

 

What IS he talking about? If there had been covenant problems then they wouldn’t have been able to refinance at better terms. The threshol - the amount of ebitda that the lenders require the company to be delivering - have been lowered, because evidently the lenders are sufficiently confident about the long term future of the business that they are relaxing the covenants.

Winnifrith and his cabal of short-selling con artists have had some success driving down Avanti shares, but the long-promised ‘wipe-out’ continues to elude them. 

 

Perhaps, to be fair to him, he is so enmired in ordure that he can not recognise the stink of his own corruption. But we think he can. When it comes down to it, he’s just a bent, fifth-rate tipster.

Dan Levi's attack on Winnifrith still online

It has been more than two months now since Brokerman Dan Levi (see tab, above) wrote this column on his Guerilla Investing site, accusing Tom Winnifrith of fraud, yet still there has been no libel complaint or withdrawal of the article. It is worth a read. Sometimes we wonder if all Tom's shrieking about the supposed transgressions of others is designed to remove focus from his own murky dealings.




Exposed Tom Winnifrith. Going to Jail?
I accuse that well known financial Journalist Tom Winnifrith, shareProphets of wholesale fraud, blackmail, tax evasion and market abuse the hypocrisy charge being incidental but never the less indicative of the deceits and charges  Winnifrith now has to answer in full.
The list of charges are endless the evidence is compelling.
This is a man who has ‘Self-Styled’ himself as the ‘Sheriff of Aim’ a man that is up to his neck in market abuse, fraud and ‘dodgy’ deals par excellence. Using the cover of  ‘financial journalism’  for personal financial gain. The sheer bloody hypocrisy is jaw-dropping.  He was informed yesterday that this was coming. As per form Winnifrith has been running scared, emailing and contacting my close city friends attempting to put pressure on me not to publish. You were told and warned many times by myself that you keep attacking me and my friends and I will unleash the dogs of war. The truth of what every retail investor reads here is horrific. This is a 14 month investigation. What is written here is just the tip of a large corrupt financial scandal. There’s much more to come. Particularly rumours of a USA London listed Company seeking to bring racketeering charges in America.
Rivington St Holdings
Winnifrith, as most already know, ran the ill-fated Rivington St Holdings, a company that went bust losing thousands of share-holders millions of pounds. He was ‘booted’ by Jim Mellon for major compliance failures. Documents seen by this website paint a sorry tale on the back of a report from a KPMG investigation into the transference of £100,000 of share-holder money that was rinsed out of the company to Tyre Solutions Ltd, just before the administrators came knocking. Tyre Solutions very quickly went bust. The report found that: There were three potential areas for a fraudulent transaction. – that the initial investment proposal was a fraud on the EIS fund – that the proceed of the investment were fraudulently expended by Commercial Tyre Solutions Limited or its officers or employees – that residual assets were fraudulently disposed of before the appointment of the administrators”.  Winnifriths recollection is rather sketchy….
TW had also been actively buying stock in Athol Gold to ‘hold up’  the share-price. He was the AG Investment Advisor! This is absolutely incredible! The document has 18,  yes 18 major compliance breaches. On compliance Note/breach 13 (Unlucky for Tom) ; Athol Gold c30% held on an aggregated basis —TW inv advisor to AG. Funds keep buying AG to hold up price. Tips 1M get perf fee from AG and from funds. The full list of Compliance breach’s can be read at the bottom of this Blog.
It gets worse, a Suspicious Activity Report (SAR) filed by the compliance officer, Michelle Lees, on yet another dodgy deal orchestrated by TW, (see document at bottom of blog) with a chap called Mr Zamavi Sithole, who was on the then ‘FSA radar’, accuses him of acting ‘Ultra Vires’ which basically means illegally. Among the many allegations levelled, Winnifrith had been trying to force accelerated opening of  JPJ share trading accounts for Mr Sithole without ‘appropriate KYC,’ know your client. It further states that ‘Compliance’ was warning that any association with this client (Sithole) would be ‘very damaging’. The fact that RSCP stated the FSA had given a ‘steer’ in favour of the deal was admitted by the compliance officer to be nothing short of a lie. Complyport summed it up thus; “The potential person (Sithole) is on the FSA radar and any sale to this individual would, without putting too much colour, be regarded as laughable in the extreme unless you want to commit regulatory suicide”.

Winnifrith was motivated by 2 factors:

1. The need to increase his own wealth – even though it was mainly paper based (apart from the massive dividend he paid himself in 2011).

2. The need to cover up the fact that he should never have been allowed to run any company – and never a public one.

The Suspicious Action Report document is a record of an internal investigation into a proposed transaction that would have achieved 3 things:

1. Sold a dormant entity called T1ps Investment Management UK Limited to a chap called Sithole for £20k. BUT

2. As part of the deal Sithole would have bought £600k worth of 10% loan notes in RSH, raising much needed cash in Sept 2011, AND

3. Sithole would have bought a substantial amount of RSH shares from Ambrian, who were a motivated seller.  By doing this TW keeps the shares off the market and keeps the share price up. That is wholesale market abuse. Slam Dunk!

The problem was, Sithole was also a crook and someone at RSH found out when he tried to take out a massive life insurance policy on the back of the proposed deal with RSH.

Chris Potts & ShareProphets. #Pottsgate

Christopher Potts, who is he? Let me educate you all! Potts or ‘Pottsy’ as most corporates refer to him, used to work at Evolution Securities, a regulated individual. He’s a long time close friend and business associate of TW. ‘Pottsy’ was booted out of Evolution Securities for market abuse and censured by the then FSA and fined £75,000. Never to be  regulated ever again. Now I need to state I have no axe to grind against this man. He’s doing what most investors try to achieve and that is make money and get the information that can limit his risk.

However on the formation of shareProphets he paid £25,000 to TW for a major stake in SP. Winnifrith failed to declare the full cash transaction with not only UK tax authorities but with Company’s House. He also kept ‘Pottsy’s involvement with SP ‘quiet’. He pocketed the cash. That is fraud and tax evasion. It gets worse, much worse… Most of the companies that Pottsy invests in are given ‘glowing’ ramps by SP.
Companies such as Optibiotix, dotDigital, Ascent Resources, BlueBird Merchant Ventures, Frontier Resources (Now Called Concepta) the list goes on and on and on.. And guess what? At no time did shareProphets declare that their business partner and MAJOR share-holder in shareProphets was holding stock in these companies, not only holding but trading and making millions of pounds! That is market abuse on a gargantuan scale! shareProphets and Winnifrth were ramping their business partner and MAJOR shareholders stock! A man censured and fined for market abuse. So come on Tom speak up explain how many stocks and shares you’ve ramped that Pottsy held and lets have a look at your share-trading account/s. I’m sure YOU never traded on any of the information or companies that Pottsy was in….  Just how many brown envelopes were there?

And just where was Mr Christopher Atur Potts on Wednesday of this week? Why he was (with some difficulty to great guffaws of laughter ) cracking open bottles of champagne with Thomas Z Winnifrith at the UK Investor Cabaret night (Pre Show). You’ll all recall just how much TW hates and castigates the corporate coke sniffing, champagne ‘PR bimbos!’ and brokers. Well that party was full of them! The Hypocrisy of this fooker knows no bounds…. Retail investors are being rinsed and laughed at by these corporate hyenas and the biggest joke of all is that everyone at that party, whether it be CEO’s, Brokers Public/Investor Relations, know full well that this has been going on for years. The joke here is that TW will be hosting a seminar tomorrow at that show on Fraud. Yes on April fools day. You couldn’t make it up could you?


http://guerillainvesting.co.uk/2017/03/31/exposed-tom-winnifrith-going-jail/