Cayman Islands fintech holding company Achiko has run into “compliance issues” just months after listing on the Swiss stock exchange. The firm has called a meeting of shareholders this week to approve a plan to create a Swiss company and re-list the shares from this entity.
But some shareholders are upset that they will not be able to cast their votes the annual general meeting, called for June 18 in Zurich, because they have not yet received their shares more than six months after the listing.
Achiko is a holding company that includes Indonesian digital payments firm Mimopay and Korean digital media company Kryptonite in its portfolio. Shortly after its Swiss direct listing last year, Achiko teamed up with Hypothekarbank Lenzburg to begin building a digital financial services platform and entered into a partnership with the Swiss fintech firm Sonect, a company that creates digital ATMs in shops.
“Achiko wants to reduce friction resulting from the current domicile of the company in the Cayman Islands, as trading may have been inhibited by compliance issues,” the company informed investors as it called its AGM.
CEO Kenneth Ting said that regulatory issues related to Achiko’s Cayman incorporation had materialised after the company’s Swiss listing, hindering the transfer and trading of shares. The European Union added the Cayman Islands to its blacklist of non-cooperative tax havens in February.
“There were solid business reasons to incorporate in the Cayman Islands when Achiko was incorporated as a holding company and listing vehicle in May 2018. Achiko is a legally compliant and ethical organisation,” said Ting. “Since out listing, however, regulatory red flags have been raised for many investors, banks and trading intermediaries because there have been too many tax avoidance cases associated with Cayman.”
“Some people don’t look past that and put you in the same bucket.”
Ting added that the creation of a Swiss company would happen swiftly providing shareholders agree to the plan to shift incorporation from the Cayman Islands.
Around 75% of Achiko shares had found their way to investors. The remaining 25% have been issued but are still being held by custodian ISP Securities pending paperwork from investors. Trading in shares has been limited, according to data from SIX Group, which runs the Swiss stock exchange. The price of shares initially spiked from CHF0.70 ($0.74) to CHF2 but have since dropped to around CHF0.25.
Ting confirmed that only people registered on the company’s share ledger would be eligible to vote on the proposal to shift incorporation to Switzerland.
“If people are unhappy at not yet receiving their shares, they should fill out their paperwork for KYC [Know Your Customer anti-money laundering regulatory requirements] or nominating a custodian to which shares to be delivered,” said Ting.
Achiko was formed in 2018 by Ting and businessman Steven Goh -the latter having previously founded the digital media company Migme that was listed in Australia before going into administration.
One Achiko investor, who did not wish to be named, said his earlier investment in Migme had been rolled over into Achiko. Documents from Migme’s administrator, reviewed by swissinfo.ch, shows Migme creditors being advised to agree to the transfer of assets to the Cayman Islands entity. The anonymous investor says he has not yet received his Achiko shares despite submitting the paperwork.
Goh, along with other directors, is standing for re-election to the board at Achiko’s AGM and has been nominated as chairman and sole member of the company’s nomination and remuneration committee.
According to its annual report, Achiko posted a $6.92 million (CHF6.58 million) loss in 2019. Operating expenses increased by 72% due to increased salary costs and “significant restructuring and administrative costs related to the stock market listing”.
The company says it has ambitions to raise its profile in Switzerland and reach a potential audience of two billion people in Asia and India with payments, consumer credit, savings, loans, e-commerce, gaming, community and chat services.
“Whilst Europe is not our focal market currently, Switzerland serves as a good testing ground for the products and services that we intend to launch in South-East Asia and India, due to its smaller size and mature banking and fintech sector,” reads Achiko’s annual report.
SIX Group declined to comment on Achiko.