Rsv Shareholder's Action Group

Stock still
(Filed: 19/12/2005)
Daily Telegraph

In the past few weeks, Aim has attracted just as many headlines for its troubled stocks as it has for its star performers.

Langbar International stunned investors when dealings in the cash shell's shares were suspended after the group revealed it had been subject to serious fraud.

Last week Highbury House, the publisher chaired by former Sun editor Kelvin MacKenzie, also saw dealings in its stock suspended as refinancing talks failed.

Biofuels Corporation has drawn unwanted attention as the biodiesel group has tumbled from August's high of 189.5p to 87.5p as it tries to sort out its finances and potential bidder D1 Oils walked away.

At first sight, these cases could be seen as indicative of a more general malaise in the regulatory environment for Aim companies. David Wilkinson, a partner of entrepreneurial services at Ernst & Young, said: "It has always been accepted that, as a market for less-mature, growth companies, Aim carries a higher level of risk.

"The returns can also be higher, but you would not want your gran to invest her life savings in Aim stocks."

Investors will clearly be asking whether the way in which Aim is regulated has played a part in the recent disasters.

However, Mr Wilkinson said: "It is inevitable that some entrepreneurial businesses, striving for too much growth or over-dependent on a small number of large customers, will hit the rocks from time to time.

"But the market also places considerable reliance on the nominated advisers to ensure that the companies have genuine businesses with sensible prospects."