Broken capital market no one is fixing

Gwest booked preference shares but no notice seen for the issue.

The Jamaica Stock Exchange and the Financial Services Commission regulate the financial market, but the system is seriously broken and no one is moving to really fix it.
IC brought to the attention of the public, the appalling situation relating to Knutsford Express where the Prospectus which was signed off by both the above institutions but there is no indication how the share capital moved from 973 units to 95 million. The Auditors of the company still have not sorted out and reported on properly in the audited accounts on the movement of the share capital and the proceeds of the initial public offer, even as it was brought to public attention and the JSE was aware of it from 2014.
There is the case where a brokerage house, signed agreements and breached a series of agreements and refused to correct the errors. The FSC who should be aware of the breach failed to recognize the matter year after year, nor have the auditors dealt with the matter properly.

The FSC fell down on the job in reviewing Knutsford prospectus & reports after IPO.

GWest has published the first quarter report to June, showing the issue of 250 million preference shares, but there is no notice on the JSE website of an extraordinary general meeting called or held to approve the issue of the shares. The JSE requires that any directors’ meeting at which a change in share capital is to be considered, such information should be communicated to the JSE and when the directors consider it, the JSE is to be advised of the decision within 48 hours. The Company’s act requires that changes in share capital must be approved by shareholders. From all indications, no such thing has happened at GWest. First off GWest had no authorized preference shares up to the end of March. How and when were these shares established and approved, is the question to be answered.
GWest came to market, with results that were based on sale of property. That changed substantially in the recently concluded fiscal year, when a loss was reported. The company projected figures, showing highly profitable future, with revenues from medical services rising sharply for the just concluded fiscal year. The results to March, showed revenues well below forecast, from the new operations. The company projected medical income to March this year, at $86 million but only generated $17.4 million and that puts the issue of generating the forecasted $710 million for fiscal year ending March 2019, in grave doubt.

Knutsford Express 204, 2015 auditing accounts still filled with errors.

Admittedly, the company had projected a loss to March of $110 million but came up much lower, with a loss of $88 million. For the June interim report this year, the company generated revenues of just $25 million with a loss of $42 million. From all indications, the company will fall far short of projections, but the directors gave shareholders who gave the company, their seal of approval, very little to go on as to the immediate future. With new borrowings and big losses investors, should not be left in left in the dark as to the true state of the company’s operation and what are the likely prospects for the rest of the year. In the quarter report there is no comment about the preference shares and the reason for the increase in liability and most importantly, what are the situation relating to the expected revenues flows.
We cannot develop a serious capital market with such sloppy monitoring and total lack of concern for shareholders by directors and mentors.
The JSE and the management of Knutsford Express met in connection with the errors in the audited Financials and both parties IC is informed are to be revised.

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