Investors accuse CAB Payments of limited risk disclosure in IPO prospectus

investmentweek.co.uk:

CAB’s IPO was London’s biggest this year, with a valuation of £851m, raising £335m from investors.

The B2B cross-border payments and foreign exchange services provider's IPO was London's biggest this year, with a valuation of £851m, raising £335m from investors. According to data from the London Stock Exchange, the company's shares are down 76.5% since its float on 6 July.

The most significant drop took place on 24 October, when shares fell from 216.5 pence to 60.8 pence after CAB was forced to slash revenue expectations due to central bank interventions in several African currencies.

Fidelity Investments and Jupiter among fund houses hit by CAB Payments sell-off

RC Brown and Polar Capital, according to The Times, have alleged that the risks surrounding the company's operations in west African markets were not fully disclosed in the IPO prospectus, and have reportedly called on the Financial Conduct Authority to investigate the matter further.

Oliver Brown, investment director at RC Brown, said: «My initial thought was, we are all grown up and we all have our eyes open to investments, but it does appear that there should have been more disclosure that the company operates in, to put it diplomatically, parallel markets.

»There has been more than an element of the advisers turning a blind eye to that. There is only so much you can put in a risk document, but the fact that they have been operating in a market where it appears other major competitors are not, these parallel markets that others would not touch, that is worthy of a risk disclosure."

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Investment Week understands risk disclosures regarding the firm's operations in the