Amara dhari response to plus management statement – shocking reading that makes plus’ current management position untenable

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Board of Directors
Plus Markets Group plc
33 Queen Street,

Dear Sirs,

Plus Markets Group Plc (the “Company”)

As one of the Company’s largest shareholders, without whose funding the Company may have already ceased to exist, we are extremely disappointed at the contents of the announcement made on 8 June 2012, which we believe is inaccurate, and is a distraction from the very serious matters to be voted on by shareholders at the upcoming General Meeting and Annual General Meeting.

We do however, consider it necessary to address and respond to the points specifically referencing Amara in the aforementioned announcement.

Strategy and Formal Sale Process:

The assertion made by the Company that we agreed with the sale and overall strategy of the Company, as stated in the announcement, is inaccurate.

By way of background, the rationale for our investment in the Company in 2009, was on the basis that the Company’s strategy would be to focus on the stock exchange (“SX”) and to enhance its business by using the SX as a platform to promote tie-ups with other exchanges worldwide and to facilitate dual listings. To this end, given our substantial connections in the Middle East, we offered to provide the Company with regional offices, fund business development and marketing in the region, and provide bilingual personnel – all for the nominal sum of £1 per annum.

Following a substantive change of management at Plus, this generous offer was rejected by the Company. Our investment agreement contains specific obligations of the Company to open an office in the Middle East, to facilitate such a strategy.

We were also in discussions with several established stock exchanges located in high growth regions of the world, who were attracted to the idea of promoting dual-listings in London in conjunction with Plus. We brought this to the attention of Plus management, yet nothing was pursued.

As we expressed directly to the management of the Company, and later publicly in the press, we did not believe the strategy of pursing a Derivatives Exchange would bear fruit for Plus investors. We have been proved right.

With respect to our opposition to the proposed sale, our written correspondence to the Company’s board and its advisors on 31 January 2012 (only several days before the Formal Sales Process was announced), could not have been more clear. We have included the text for clarity:

“….As we have expressed to both management and your advisors, as significant shareholders, we oppose any attempt to sell the business in whole or part (with the exception of a minority stake in either TS or DX), and will be very vigorous in opposing any such deal, if presented…”

We did not believe, as stated, that a sale of the Company, or its main asset, in whole or part, would generate adequate returns for shareholders.

Offers to Finance:

Following our initial investment, we made it apparent to the board in both verbal and written communication that we were willing and able to provide further financing should it be required. In fact, we made specific provision for future fundraisings within the Amara corporate structure.

We also wish to make the point that our initial financing was completed without the incurrence of exorbitant advisors fees in contrast to those fees which have been incurred by the Company more recently and in particular, in relation to the current proposed transaction. 

Please also note that at the time of our initial investment, our directors and shareholders went through the full FSA regulatory process without complication.

Summer 2011 Offer of Funding:

We were approached by the Company’s advisors in the summer of 2011, with a view to providing additional financing to the Company via either an underwritten private placement or an underwritten rights issue, whereby the underwriter(s) would cover any shortfall if other shareholders did not take up their entitlement. We expressed our willingness to provide finance, however, explained that any such financing was conditional on a change of management of the Company as we did not believe that such management had the capability to take the Company forward and make it a success.

When it became apparent to the Company that the other major shareholders did not wish to participate in such fundraising and that we were the only shareholders offering financing (with a condition of management change), discussions were promptly terminated. Astonishingly, the Company paid their advisers a fee relating to these aborted discussions!

Amara’s shareholders, who were willing to participate in such further funding of Plus, include some of the most prominent and wealthiest names in the Middle East. There is not, nor was there ever, an issue with proof of funds either during our most recent discussions with the Company or when we provided the Company with the initial £5 million. We would have welcomed discussions and negotiations with the Company to have reached the point where the amount required by the Company specified, terms agreed and confirmation of funds was required.

January 2012 Offer of Funding:

During the third week of December 2011, the Company’s CEO and Senior Independent Director met with the Amara board in London. At this meeting, the Company’s representatives stated that the Company was in serious need of financing and that an amount of £2 million was required. On that basis, an offer of underwritten funding was prepared for discussion and sent to the Company via our advisors Markab Capital on 3 January 2012. The term sheet was explicit in that such financing was “in conjunction with Amara Dhari Investments Limited”.

On 13 January 2012, we chased the Company as we had heard nothing from them since our term sheet was submitted. We have included the text for clarity:

“….I remind the board that our offer is not open indefinitely and we have had no substantive discussions with the Company to advance the financing since our offer has been tabled, despite the Company’s critical funding requirements…..”

On 20 January 2012, the Company finally responded in writing, suggesting a telephone call to discuss the matter further, stating inter alia, that their initial assessment of the capital requirements had been too low and that the pricing of our private placement offer was not high enough. The Company, however, did not specify any amounts that it believed it would require, nor did they suggest a price at which financing would be acceptable.

Thus, on 24 January 2012, a call was arranged between Amara and members of the Plus executive board and its advisors to discuss our offer of funding. During this call the general principles of a financing were discussed, including changes we believed necessary to ensure the Company’s success. During this call management neither suggested a pricing level that it deemed acceptable nor outlined the specific quantum it required. We mutually agreed to continue these discussions the following day, with a telephone call being arranged by management and its advisors. No-one got back to us, so on 31 January 2012, we again chased the Company. We have included the text for clarity:

“…It has been almost one week since we last spoke, after having agreed on our call to continue the conversation the next day and begin to more fully discuss the terms of a transaction.

We have yet to have a meaningful discussion on terms and have not once had any sort of negotiation, despite our term sheet now
being with you for almost a month.

For a company that is weeks away from potentially being put in the situation of an orderly wind-down by the regulator due to lack of capital, where all shareholder value will be destroyed, I find it astonishing that management have not engaged in substantive discussions with us.

It is quite clear that you have no interest in proceeding with a financing provided by us….”

Several days later, having failed to respond to our offer, the Company announced the Formal Sales Process.

Continued Offers of Financial Support:

On 5 March 2012, in written correspondence to the Company’s advisors, upon electing not to participate in the formal sale process, we reiterated our offer of financial support. For clarity we have included the text:

“…We remind you and the management that we remain open to financing the Company, as an existing shareholder, through a placing. We would welcome a serious dialogue with the management of the Company to further such a transaction.

Further, as we have previously stated, we would be against any non-existing shareholder financing, particularly in light of several offers over the past two years to refinance the Company at much higher prices, which the Company had rejected. After rejecting these offers, we would take a negative view of any attempt to refinance the Company with outside shareholders, given the shares are at or near an all time low, as we believe the result would be a punitive dilution to existing shareholders, who have stuck with the business through this difficult period.

We are available at any time to discuss this matter and look forward to working together with the Company. Please bring this position to the attention of the Company’s board….”

On 9 March 2012, having received no response to the above correspondence, we sent further correspondence to the Company’s advisors. For clarity we have included the text:

“…It has been one business week since we sent you our invitation to discuss a funding solution for PLUS and we have heard nothing.

Given the precarious nature of the Company’s financial position and our belief that it is not in the best interest of shareholders for management to sell or refinance the business with outside parties while the share price is near all time lows, we find it disturbing that yourself as advisor and management have not initiated any discussions with us.

The fact that management have not held any substantive dialogue with us as long term shareholders to discuss a financing when a firm term sheet was put forward by us in January (was on the table for a month and not once were terms even discussed), and further declined to engage in discussions with us after yet another invitation was put forward to do so, raises serious questions. These concerns arise particularly in light of the Company’s desperate need for funding.

If management have a solution that they believe will satisfy shareholders and the business concerns of PLUS, it should put them to shareholders for discussion immediately. Absent that, it at the very least indicates uncertainty. Uncertainty creates risk. In case of PLUS, an RIE, risk should be minimised by the directors, acting prudently, by pursuing all avenues available to it to ensure the Company survives. We know management is not doing this, by failing to engage any dialogue with us regarding funding.

We cannot believe that other shareholders do not share similar views to ourselves. It is time that the management of the Company listen to its shareholder base.

As always, we are available to speak at any time and expect a timely response. Please bring this position to the attention of the Company’s board…..”

The assertion therefore that the Company was “not aware” of an offer of funding from us is untrue, as it is very clear that offers of funding were presented both verbally and in writing to the Company and its advisors.

It is also evident that the level of co-operation required from management to assist us in the production of a business plan (as required by the FSA and relating to a change in control should we have provided funding), was not forthcoming.


As we have stated both privately and publicly, we believe that the actions of this board have directly led to the destruction of shareholder value, witnessed by the substantial decline in the value of our holdings since we have made our investment.

Accordingly, we have initiated steps to reconstitute the board, starting with our nominated director Ahmad Al Asfour (given this is a replacement procedure which is less complex than that under the Companies Act 2006). As the Company is aware, we put into motion Al Asfour’s replacement on the board in early May, using the procedures under our investment agreement with Plus. The board is now in possession of a legal opinion noting that we, the board of Amara, have the authority to manage the business and have acted pursuant to that authority to remove Al Asfour. Amara’s directors, Ahmad Al-Omani and Spencer Wilson, constitute the board of Amara, and have been the sole directors since its investment in Plus.


We would like to reiterate our view that the management of the Company should be focusing all of its efforts on the substantial task of creating and preserving shareholder value, rather than releasing press statements which are derogatory to the very shareholders who have historically provided much needed financing, without which the Company may not exist today.

We are appalled that executive management have agreed to take “enhanced” payouts of £423,000, for selling shareholders’ business for £1 and call on management to waive those payouts.

Moreover, we consider the expenditure of £960,000 of shareholder funds on professional and advisory fees to sell the business for £1 as incompetent, particularly in light of the fact that the main reason for the forced sale of the business is lack of capital.

Very truly yours,

Spencer Wilson

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