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XMFSinchiruna (27.51)

The Mysterious Disappearance of Anglo American

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August 07, 2009 – Comments (10)

Gather 'round, Fools ... we have a juicy mystery on our hands.

I know Anglo American isn't exactly a household name here in the States. In fact, when I covered the proposed takeover of AAUK by Swiss mining giant Xstrata, I swear I could hear crickets chirping through the interweb.

Still, we're talking about a truly massive resource company that recently reported first half operating profit of $2.1 billion. Though down significantly from $6.2 billion a year earlier, in the present economic environment these are robust earnings from a global powerhouse in coal, base metals, platinum, etc.

Immediately following that July 31 earnings release, I noticed that my Yahoo service offered only an empty space-saver for my AAUK holding, saying "no such ticker symbol". "Hmmm... must be a glitch", I thought, so I waited for a couple of days for some tech dude to notice the problem and correct it. Meanwhile: crickets. Half way through the week, I'd had enough, so I contacted Yahoo, and receoved a response the next day saying they must have changed the symbol to AAL.L. I don't think so!! I own shares of the ADR that trades at $16 and change ... not the London shares trading at nearly GBP 1,900!

Now my curiosity was beginning to stir. I checked the Nasdaq website, and confirmed they showed no AAUK listing whatsoever. Surely, when a multi-billion corporation abruptlyde-lists from the Nasdaq, such action must be accompanied by a press release ... right? No mention on the Nasdaq site ... crickets. All itindicated was that AAUK changed to AAUKY on August 3.

Well, at least the Anglo American website's investors section will set me straight with up-to-date information on what's going on! To my utter amazement ... NOTHING! Even though the website has been updated to remove the ADR from the "share information" section and replace it with a new ticker symbol for a pink sheets listing (AAUKY.PK), the company somehow has the gall to do so without so much as drafting a press release!

This is more than a mystery ... it's an outrage! I don't want these stinking pink sheets ... I want my ADR shares back! And more than anything, I want an explanation. Something feels entirely wrong with this whole event, giving me a sense of forboding about what the company may reveal when they finally get around to 

This is no oversight, and there is simply no excuse. There will be consequences for their failure to inform ADR shareholders of the delisting in a timely manner. The CAPS listing for AAUK shows the time of the last quote as 4pm on 7/31, corroborating my observation that the ticker ceased functioning directly after release of the company's financial results. Was there something in there that Nasdaq found to indicate ineligibilty for listing on their exchange?

I now see CAPS blogger MikeBobulinski posted on the mystery yesterday ... glad someone was paying attention! :)

According to the only other blogger I found that has covered the event, there was at least some foreknowledge that the ADR would delist:

TORONTO, July 31 /CNW/ - Standard & Poor's Canadian Index Operations announces the following index changes: The ADR shares of Anglo American PLC (NASDAQ:AAUK) will move to trade OTC after the close on Friday, July 31, 2009. The company will be removed from the S&P/TSX Global Mining and Global Base Metals Indices after the close on Friday, July 31, 2009.

This makes it even clearer that Anglo CEO Cynthia Carroll has some serious 'splainin' to do.

Now, I have to say, shame on Bloomberg, Reuters, AP, and every other financial newswire service that failed to provide timely information on a major development like the delisting of ADR shares from a major American exchange. Principally, however, the buck stops with Anglo's management.

I expect a full explanation from Anglo American immediately, and I expect an investigation into the silence surrounding the move.

I won't hold my breath, since one can grow old waiting for the truth to be told. Remember the $134 billion bond caper? And with Ken Lewis still at the helm of BAC, we certainly can't expect Carroll's post to be in jeopardy. Accountability and transparency are sorely lacking in the financial markets these days.

Please post any information you encounter about this event, and I will do the same.

 

10 Comments – Post Your Own

#1) On August 07, 2009 at 6:53 AM, XMFSinchiruna (27.51) wrote:

Sorry for my typos ... It was 6am, pre-coffee, and my space bar seems to be wearing out from overuse. :)

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#2) On August 07, 2009 at 7:15 AM, Deepminer (< 20) wrote:

Below is the response from Anglo American's offices - the change is not due to the company's action as these are unsponsored ADRs:

Thank you for your enquiry regarding the delisting from NASDAQ of the unsponsored Anglo American ADRS.  Anglo American  plc  ordinary shares’ primary listing is on the London Stock Exchange with a secondary listing on the Johannesburg Stock Exchange (as well as listings on the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange).  Anglo American maintains the highest standards of corporate governance and public disclosure, as required as a consequence of these listings.    The unsponsored ADRS for ordinary shares of Anglo American plc were created by various financial institutions, or issuing banks, and are not a result of any action taken by Anglo American – indeed Anglo American has no contractual or other arrangements regarding these ADRS with any of the issuing banks. Anglo American has not registered its shares with the SEC nor has it sought to list its ADRS in the US but the unsponsored ADRS were listed on NASDAQ at the request of the issuing banks (inter alia JP Morgan, Bank of New York Mellon etc). Until recently, these unsponsored ADRS traded on the NASDAQ SmallCap Issuers market. However, as a consequence of NASDAQ becoming a “national securities exchange” the SEC required all securities trading on this exchange to be registered under section 12(b) of the Securities Exchange Act, subject to a grace period which expired on 1 August 2009.   Registration under the Securities Exchange Act involves a significant and unnecessary cost burden and, consistent with its position over many years, Anglo American, like certain other overseas companies (e.g. Nissan and Fuji) decided not to seek such a registration.    Hence, the delisting from NASDAQ and the move to the OTC Pink Sheets on 1 August 2009 occurred automatically. The unsponsored ADRS continue to be listed on the OTC Pink Sheets and the following market makers currently make a market in them:

 

MMIDNameLocation ABLENatixis Bleichroeder, IncNew York, NY ARCAArchipelago Trading Services Inc.Chicago, IL AUTOAutomated Trading Desk Fincl SvcsMt. Pleasant, SC DOMSDomestic Securities, Inc.Edison, NJ ETRFE*Trade Capital Markets, LLC IMM Chicago, IL HDSNHudson Securities, IncOTC Trading - Jersey City, NJ IAEXIsrael A. Englander & CONew York, NY INTLIntl Trading, Inc.Trading Room - Altamonte Springs , FL JANEJane Street Markets, LLCNew York, NY JEFFJefferies & Co., Inc.New York, NY JSUPJesup & Lamont Securities Corp.Longwood, FL LABSLaBranche Financial Services, Inc.Trading Dept. NY LAFCR. F. Lafferty & Co.New York, NY LFCMLighthouse Financial Group LLCNew York, NY MAXMMaxim Group LLCRed Bank, NJ MLCOMerrill Lynch, Pierce, FSNew York, NY NITEKnight Equity Markets, LPJersey City, NJ PALCPali Capital IncNew York, NY PERTPershing Trading CompanyJersey City, NJ SBSHCitigroup Global Markets Inc.New York, NY STEWCollins Stewart Inc.New York, NY STXGStockCross Financial Services Lake Mary, FL VERTThe Vertical Group Inc.New York, NY VNDMVandham Securities Corp.

Woodclifflake, NJ Foreig

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#3) On August 07, 2009 at 8:03 AM, XMFSinchiruna (27.51) wrote:

Deepminer

Thank you for the clarification! 

I still maintain that a press release would have been the right way to go. Furthermore, I reiterate my disappointment in the financial news wires for not providing even a shred of coverage.

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#4) On August 07, 2009 at 9:49 AM, lquadland10 (< 20) wrote:

Registration under the Securities Exchange Act involves a significant and unnecessary cost burden and, consistent with its position over many years, Anglo American, like certain other overseas companies (e.g. Nissan and Fuji) decided not to seek such a registration.

 

It seems to me that there is some nefarious accounting going on that they did not want the SEC to know about.IMHO 

On another note could it be due to the TARP money given to these banks. 

(inter alia JP Morgan, Bank of New York Mellon etc NJ MLCOMerrill Lynch

 You are right about the financial Cartel not providing coverage.

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#5) On August 07, 2009 at 10:03 AM, XMFSinchiruna (27.51) wrote:

Can someone help me solve a totally unrelated mystery?

Anyone using Mozilla's Firefox web browser, would you mind loading this article page and telling me if the the ad on the left is covering a portion of the text for you?

http://www.fool.com/investing/general/2009/08/06/bring-your-shipping-stocks-into-drydock.aspx

I'm trying to figure out if something's up with my browser in particular or if there's a formatting issue I need to report. Thanks so much!

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#6) On August 07, 2009 at 11:20 AM, 100ozRound (29.37) wrote:

Sinch - Im using Firefox 3.5 and it looks fine to me

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#7) On August 07, 2009 at 10:37 PM, Tastylunch (29.28) wrote:

TMFSinchiruna (

no problem on my end either Sinchi with that page using Firefox.

Maybe dump your cache and try again?

RE: AAUK that is really really weird and pretty unacceptable if you ask me!

check this out Sinchi, this is bizarre

http://www.bloggingstocks.com/2009/08/04/aaukys-mysterious-delisting-follow-up-a-small-tidbit-of-news/

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#8) On August 08, 2009 at 2:25 PM, MikeBobulinski (< 20) wrote:

Deepminer, thanks for posting that response.  It explains the delisting, but does little in the way of explaining why it wasn't made more public, and I am equally surprised that the media didn't really have anything to report on it.  A company of that size having its ADRs delisted merits at least a two or three liner in the hot sheets for any day.  Heck I have read one or two liners on more obscure companies for smaller "media" worthy happenings.  This one is neither small or obscure and certainly merits something in the way of "media" worthy attention.

Oh, well.  Guess I'll just have to wait and see what happens to my $16 penny stock.  Fool on... 

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#9) On August 10, 2009 at 4:50 AM, Deepminer (< 20) wrote:

From what I am told, the key to this is that the ADRs are unsponsored - that is to say, nothing to do with the company. The ADRs have always been unsponsored and therefore are a creation of a group of US banks in order to enable trade in the company's stock more easily for US investors.The company has no contractual or other arrangements over the ADRs and they are therefore not responsible for them. Seems fair enough to me if they don't actually want a US listing, why jump through all the SEC hoops?

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#10) On August 11, 2009 at 3:56 PM, silverminer (30.77) wrote:

Here is my article on the delisting:

http://www.fool.com/investing/international/2009/08/11/a-crash-course-in-adrs.aspx

Incredibly, after 10 days, this is still a breaking news story ... since none of the major media outlets saw fit to cover the delisting. It's not every day I get to be the first to cover a significant development with a published article, but in this case I was.

Special thanks to Deepminer for posting the company's explanation from their website, which I don't believe had been posted by the time of my initial posting.

 

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