If you are going to take public money, you’d better be good on detail. There can be no compromise. And if you are as good as you say you are, why not fight tooth and nail to prove your credibility? There is something decidedly odd about the fact that the most-hyped planned listing on the JSE has fizzled out without so much as a fight.
The JSE wrote to Sagarmatha on Tuesday refusing to list the company this Friday saying the firm had failed to comply with the Companies Act. Section 33 of the Act requires the submission of financial statements to the Companies and Intellectual Property Commission (CIPC). Sagarmatha claims it had ticked all the required boxes and that it was fully compliant and that the JSE is nit-picking on technicalities.
“The technicality suggests that Sagarmatha Technologies was non-compliant on the date that the pre-listing statement (PLS) was approved (28th March 2018.) The CIPC has confirmed otherwise, stating that at no stage, was Sagarmatha Technologies not compliant,” the company said in a statement.
Surely if you were properly prepared and the JSE was in error, it would be a simple enough thing to prove?
It just does not make sense that the listing on the JSE has fallen apart on a provable fact.
The stance of the company does raise serious questions about the intention of its listing, billed as an opportunity to benefit more than three million workers in South Africa. That the company said the listing would have benefitted trades unions, civil society organisations, black entrepreneurs, black businesses, employees and academic institutions. It would have seen 5,000 young IT professionals trained.
Well, that needn’t change one bit.
I'd like to commend Adri Senekal de Wet and Iqbal Surve for not using the word "blockchain" in the Sagarmatha prospectus.— Andrew Fraser (@Arfness) April 10, 2018
If Sagarmatha is the great African Unicorn it bills itself to be, funders will be lining up to take up the opportunity it represents?
What am I missing?
It claims there were investors ready to plough R4 billion into the firm and because the JSE has withdrawn that permission to list this week, it cannot accept applications for shares from committed investors.
Again, if there was such hunger for the shares, why not simply prove your bone fides to the JSE? A failure to do so is a massive disservice to them.
The failure of this listing had nothing to do with the fact that the firm faced legitimate media scrutiny. There was no disinformation campaign. Sagarmatha was just unconvincing and based on JSE regulation did not have its ducks in a row to take public money.
Sagarmatha suggests that investors on the JSE are simply not sophisticated enough to appreciate the wonders it presents and compares itself to other loss-making entities like Uber and Airbnb and even Amazon.com.
“Sagarmatha is of the opinion that Africa should own its own MSP [multi-sided platform], so that Africans are able to take control of their own technology and data and eCommerce destiny. Regrettably, that next step forward was cut short today (Wednesday). “
Well that it is not strictly true.
The JSE simply refused to list the company this week and said it was welcome to go through the process again.
Surely it would not be much easier than embark on a brand new listing process via the US or Hong Kong?
Why has Sagarmatha thrown in the towel at such a seemingly small obstacle? Business is full of obstacles, trials and tribulations. Yet the company is averse to doing as the JSE suggests.
Now it says it will consider a sale of assets to foreign investors or a listing on presumably more appreciative exchanges where investors have a better understanding of the value offering Sagarmatha presents.
It mentions New York and Hong Kong.
Good luck to them.
And hopefully the scores of beneficiaries who supported the JSE listing will get the returns they have been promised.
Bruce Whitfield is a multi-platform award winning financial journalist and broadcaster. He is a sought after public speaker on the political economy.