Zaim Credit Systems PLC (LSE:ZAIM), a UK holding company of Russia-based fintech company Zaim Express, has seemingly lost ownership of its Russian subsidiary following an unauthorised transfer of ownership.
In the Russian State Register of Legal Entities, the ownership of Zaim Express was transferred to a ‘Mr Sidorov’ without the consent or knowledge of the board.
Mr Sidorov apparently took ownership of the company when a new lender, against the authorisation of the board, enforced its security over shares in Zaim Express after calling on owed debts, under which the securities were sold on to Mr Sidorov.
Only following an investigation with the help of international advisors was the change, which Zaim Credit has called “questionable from a Russian and English law standpoint”, discovered.
“It came to our attention during September 2022 that something was amiss when the Zaim Express team in Moscow stopped communicating with the directors of the company in London,” a statement from the company's continuing director read.
Malcolm Groat, non-executive chairman of Zaim Credit Systems, commented: "In view of the tremendous efforts made during Covid to grow the business in Russia and begin to take the model to new countries and in view of the success achieved operationally and commercially in the past two years, it is tragic that everything that has been built and the prospects that lay ahead of the Group has been taken from us. Zaim is left severely damaged and must now plot a new course to bring back value for our investors."
Initial enquiries led to the suspended trading of Zaim's London-listed shares on 28 September 2022.
The company said it is currently in talks with the Financial Conduct Authority to lift the suspension, and will update the market in due course.
Zaim’s website is under the control of the team in Moscow and therefore should no longer be relied upon, it added.
Interim report released
Zaim also released its half-year report on Wednesday which saw gross outstanding loans to customers increased by 73% from £36mln in the first half of 2021 to £63mln in the first half of 2022.
At the same time, total outstanding loans, measured at amortised cost, grew by 56% from £2.8mln to £4.4mln
In the statement, Zaim chief executive Siro Cicconi commented: “Given the excellent progress made by the Zaim Express business in difficult conditions since 2020, I am very sad about the events that have taken place since the end of this reporting period that mean that the company will not in the short term at least receive the cashflow benefits of this improved performance.”