Aim of the Company
2017 Results
2016 Results
Lance O'Neill and CCCAL Who are City and Claremont?
Shareholder Return
What's the End Game?


Lance O'Neill
Benjamin Edwards (appt 2016)
Nigel Duxbury (resigned 2016)


About this Site
Financial Performance
The Accounts
Major Shareholders
e-primefinancial Debacle
Relevant Links


Calix Limited
Alba Minerals
Andes Energia


The smaller minority shareholders of EP&F Capital have every right to be extremely angry with the directors over their custodianship of the company over the last 12 years. To so blatantly and consistently look after their own interests for well over a decade tells one a lot about the directors. Professional integrity anyone?

That aside there are some obvious lessons to learnt from the EP&F Capital fiasco. The main one is to do as much due diligence as possible if you have a shareholding in a company that plans to delist from the stock market. Specificially examine the history and performance of the companys' directors. Try and identify related parties (not always easy). Are related parties also major shareholders? Ask yourself if the directors have a history of creating value for shareholders? Anyone who researched e-primefinancial would know the answer to this question.

Given EP&F Capital was a simple cash shell then there are some further obvious questions that should have been asked of the directors and related parties. For example are the directors involved with any other businesses? Are they shareholders in other businesses? And here's a good one. Could the directors be described as "serial entrepreneurs"? If any of these are the case then its very possible they will simply use the companys' funds, as with EP&F, to support these other business interests to the detriment of the minority shareholders.

Also try and determine the likely running costs. As of December 2015 the 2 directors' salaries equated to 5.5% of the companys' net asset value. You just need to look at what has happened to the companys' net asset value to know this salary level is not sustainable. But did the directors' reduce their salaries to a level reflective of their performance? Did they heck. And that's just the salaries. Total running costs are 9% of the net asset value. That's the hurdle the directors' have to clear to make a profit. EP&F Capital PLC is clearly not a viable business. However, and this is important, EP&F does not have to be a viable business for the directors to profit.

Ultimately the warning signs were all there and in many ways shareholders have only themselves to blame. Why did the shares trade at a 40% discount to cash just prior to delisting for example? Never underestimate the prescience of the stock-market! Anyone who held onto their shares prior to delisting made a terrible mistake. Even selling at a 40% discount, incredible as it may seem, was absolutely the correct thing to do. However it's still deeply surprising to watch the blatant self-interest exercised by the directors over the years.

In our opinion for a small cash shell like EP&F is only viable if the director's have large personal shareholdings and are prepared to work for little to no salary. Their shareholdings should be the incentive to make the business a success. Ideally you want young and hungry individuals with no other significant business interests. That way you can expect them to be totally focussed on generating shareholder value. Unfortunately EP&F is a text-book example of how this type of business should NOT be run. It became sadly apparent after a couple of years that the business was unviable and had degenerated into a vehicle run solely for the directors' benefit. And make no mistake they have benefited big-time.

The real problem here is how can a couple of directors with 17.6% of the shares exercise such control over the company? There are clearly connected parties involved who are supporting the company. The obvious connected party is the offshore vehicle City & Claremont who are EP&Fs' largest shareholder with 15.9% of the equity. Totalled that is 33.5% of the equity. Is that enough for control? Unfortunately the answer is probably yes. The rest of the shareholder base is hopelessly fragmented. Hundreds of tiny shareholdings, many in nominee accounts. Hardly anyone bothers to vote on the AGM resolutions. Probably because they've long ago given up on the company. Or forgotten it even exists.

What does the future hold for EP&F Capital? Almost certainly more of the same. We predict the directors, and related parties, will continue to benefit financially at the expense of the smaller shareholders. Since the value of EP&F shares is almost certainly zero to smaller shareholders there is little financial motivation for continuing to monitor the company. However this website will continue to document the goings-on at EP&F. For comic effect if nothing else. There are lessons to be learned here.