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Carduus Housing Plc (CHPB)

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Thursday 12 May, 2016

Carduus Housing Plc

Update on Financial Position-Director resignations

12 May 2016

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CARDUUS HOUSING PLC
(“Carduus Housing” or the “Company”)

Update regarding Financial Position
Director resignations
Change of Adviser

Update on suspension and financial position

On 14 March 2016, trading on the ISDX Growth Market in Carduus Housing’s 6.5% and 6.25% unsecured bonds due 2020 was suspended, pending clarification of the Company’s financial position.  The suspension was requested following the discovery of certain discrepancies during the preparation of the Company’s interim results for the six months ended 31 December 2015. 

Following the suspension, the Directors of the Company formed a Committee of the Board (the “Committee”), comprising Luke Cairns and Drew Oswald, to investigate the discrepancies.

The Committee’s investigation revealed that between October and March 2016 a series of payments were made by Carduus Housing to its parent company, Carduus Finance Limited (“Carduus Finance”), totalling in the region of £1.429 million. The investigation also revealed that, in the same period, Carduus Housing made payments to an unrelated third party totalling in the region of £0.875 million.

Of the sums mentioned above, the Committee estimates that payments totalling in the region of £1.675million (the “Payments”) were not in accordance with the Company’s budgeted administration costs or the Company’s Investment Strategy; the Payments were made without the knowledge of the Committee or the Company’s Corporate Adviser, Peterhouse Corporate Finance

Carduus Housing currently owns 37 properties, acquired in pursuit of its Investment Strategy, and has available cash of approximately £1.9 million. As such, the Company is not expected to breach any of the terms of the Bonds in the immediate future. However, if the Company is unable to recover substantially all of the Payments or cannot otherwise address the deficit resulting from the Payments, the Company may not be able to redeem the Bonds in full at the end of their term in 2020.

With this in mind, in parallel to the work of the Committee, Carduus Finance has been seeking appropriate partners to engage upon enhancements to the current strategy with a view to maximizing the returns for the Company. Specifically Carduus Finance entered into detailed negotiations with the team headed up by Chartered Accountant Mr Pankaj Rajani  resulting in it agreeing to sell its entire interest in Carduus Housing plc.

As a result of this transaction, 100% of the issued ordinary share capital of Carduus Housing has been acquired for the value of £1 and the shareholdings are split between Mr Rajani 75% and Beaufort Securities 25%.

In light of the above events, Peterhouse Corporate Finance Limited has resigned as Corporate Adviser to the Company, with immediate effect

Additionally, Brian Gilmour, Drew Oswald and Luke Cairns have resigned as directors of the Company again with immediate effect.

Pankaj Rajani and Darren Edmonston have been appointed as Directors of the Company (the “New Board”) with immediate effect.

The New Board believes that certain amendments to the current strategy will be required to ensure the Company is in a position to redeem the bonds in full at the end of their term in 2020 and further details in respect of any change of strategy shall be announced in due course.

A more detailed update of the Company’s financial position is expected to be provided when the Company announces its Interim Results. In the meantime, trading in the Bonds will remain suspended.

Directorate changes

Details of the new directors referenced above are as follows:

Pankaj Rajani

Pankaj is a Chartered Accountant with more than 29 years of professional experience in accountancy and corporate finance. Pankaj qualified as a Chartered Accountant with KPMG in 1987 and was a founding partner of Macilvin Moore in 1990.   Pankaj has been instrumental in the organic growth of the firm and the recent merger that saw the creation of Macalvins, where he remains a partner.

Current directorships Past directorships (five years)                        
PSH Grosvenor Consultants LLP MMR Financial Consultants Limited
Plutus Estates Limited
Elysian Fuels 7 LLP
Lomas Kington Limited
The Invicta Film Partnership no.43 LLP
Macilvin Moore Revers LLP
Silverbrook Estates Limited
Crowngain Limited
Macalvins Limited
Eightways Estates Limited

Darren Edmonston

Darren is a founding partner of an accountancy [Bushwood] created more than 14 years ago. He is also a director of several firms.

Current directorships Past directorships (five years)                       
Explore Pharma Limited Toners Reunited Limited
PCG Clinical Limited Sulvus Inspections Limited
Globe Capital Administration Limited Bushwood Accountants Limited
Welney Administration Limited Sud Italia Limited
Toddbrook Leisure Limited
Aquarius Employment Bureau (London) Limited
Maw Melford Limited
Toddbrook Investments Limited
EDS Solutions Limited
Cleanbrite (UK) Limited
Cleanbrite FM Limited
IGF7 Ltd
Christopher Benn Limited
Nominee Secretaries Limited
Katharina Limited
Cleanbrite Facilitation Limited
Asset Movement Limited
1st Nominees Limited

 Change of Corporate Adviser

  Carduus Housing Plc is also pleased to announce the appointment of Alexander David Securities Limited as the Company’s Corporate Adviser with immediate effect.   

The Directors of Carduus Housing accept responsibility for the contents of this   announcement.

--ENDS--

For further information please contact:
Darren Edmonston; Pankaj Rajani
Tel: + 07976 664813; +44 7815 880 593

ISDX CORPORATE ADVISER:
Alexander David Securities Limited
David Scott – Corporate Finance
James Dewhurst – Institutional Sales 
Telephone: +44 (0) 20 7448 9820
http://www.ad-securities.com
49 Queen Victoria Street, London EC4N 4SA


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