Investigations and Enquires Team
Financial Services Authority
25 The North Colonnade
London E14 5HS
Sent via Fax, Email & Registered Post. 27 February. 2013.
F.A.O Martin Wheatley Managing Director, Conduct Business Unit & CEO Elect FSA
Sefton Resources and Market abuse under the FSMA 2000 – an open letter to the FSA
I formally request that you launch an investigation into AIM listed Sefton Resources, its PR firm Cadogan, its IR man Doctor Michael Green and its chairman Jim Ellerton who have committed market abuse under the FSMA 2000 by issuing via RNS statements information that they know to be misleading in an attempt to persuade unsophisticated private investors & others to buy shares ahead of an equity issue.
As you are no doubt aware the AIM team is already investigating this company via official complaints lodged personally by myself in the latter part of 2012.
On September 11th 2012 the company issued interim results via RNS
The interims stated:
“Although oil production for the first half of 2012 at 21,755 barrels or an average of 120 barrels of oil per day (bopd) was higher than in the comparable period (19,968 barrels or an average of 110 bopd in 1H, 2011), there were several factors that served to restrict oil production. Encouragingly, since this period ended we have seen production in excess of our targeted level of 200 bopd and average in the vicinity of 170 bopd over a limited period”
It also stated that: “Workovers and cyclic steaming continue to deliver production growth”
In fact the 170 bopd figure referred to just a few days at the start of July. In July as a whole output averaged 116 bopd ( down on H1) and so the statement was misleading. In August output averaged 97 bopd. A further fall. The company’s statement was therefore misleading.
Indeed to say that it was delivering production growth when in fact production was falling – as the company must have known on Sept 11 – was just plain untrue.
On 6th December the company raised £750,000 via a share issue. It must have known that a share issue was on the way and I would ask that an urgent and formal investigation be started at once into whether market abuse as per the FSMA 2000 and the issuance of misleading statements has taken place.
The AIM team that is looking at Sefton has details on numerous other RNS releases which are also worthy of investigation, notably the claims made in November 2011 about a four well drilling campaign and likely output as a result which appeared two weeks before another placing. The company did not actually have permission to drill 4 wells as it subsequently admitted via RNS.
At this point in time I must make you aware that we are of the honest opinion that Sefton Resources are a Fraud company whose only raison d’etre is to line the pockets of the BOD. This matter is also now the subject of a High Court libel action that will require your attendance on the defence witness list as to what investigations or actions you have taken to address these mis-leading company statements.
I trust that you will expedite this investigation as rapidly as possible.