On Monday 4 July 2022, the FCA issued Umuthi Healthcare Solutions PLC (UHS) with a First Supervisory Notice (FSN) confirming its decision to unilaterally discontinue the listing of its standard shares from the Official List with immediate effect.

Following the Upper Tribunal’s recent interim judgment, the regulator has published the FSN in full, which explains in detail its decision.

The FCA found that there was a fundamental uncertainty about the supply of UHS’ shares. UHS was unable to provide the FCA with a proper account of supply and ownership of shares, information vital to proper price formation. The company was also in an ongoing, extended public dispute with individual investors as to the existence of certain shares.

In addition, UHS had failed to publish its required financial results on time or in some cases at all, and previous financial reports had proved unreliable. This uncertain financial position added to concerns that ordinary, regular dealing in the shares was not possible.

The FCA had already taken action to suspend the listing of UHS shares in June 2021. Since then, UHS had failed to fix the underlying issues despite repeated opportunities to do so.

The FCA considered the cancellation of UHS’ shares to be proportionate, given the need to protect investors and the integrity of both the market and the Official List.

UHS has referred the regulator’s decision to the Upper Tribunal. On 18 October 2022, the Upper Tribunal handed down judgment in two interim applications, first, allowing UHS to make its reference to the Upper Tribunal outside the standard 28-day time limit and, second, refusing to suspend the FCA’s decision to cancel UHS’s listing. The Upper Tribunal will determine whether to uphold the FCA’s decision against UHS at a full hearing. This decision will be made public on the Upper Tribunal’s website.

Mark Steward, Executive Director of Enforcement & Market Oversight at the FCA, said:

‘For the shares of listed companies to be traded freely and in an orderly manner, investors must be able to understand basic facts about supply and the financial health of the company.

‘UHS blames others for some of its problems, but our decision was not about casting blame or taking sides in a dispute between the Company and its investors.

‘UHS does not meet the most fundamental standards of a listed company. These include clarity and certainty of its share issuance and publication of regular and reliable financial reports.

‘Ultimately, such shortcomings jeopardise the orderliness of the markets that the FCA oversees and this novel and proportionate use of our powers demonstrates that we will do what is required to protect those markets.’