Oil tycoon Frank Timis tells why the regulators were wrong to single him out
The best lie, according to Frank Timis, is the truth, because you never get caught.
Its an interesting statement, considering the source. The 45-year-old Romanian-born entrepreneur is one of the most controversial public company bosses in Britain.
A self-made man who fled the country of his birth at 16 and ended up in the wilds of western Australias mining country, he went on to build companies in Kazakhstan, Romania and west Africa. He listed some of them in London. Along the way he has by his own calculations made himself a billionaire though the 2009 Sunday Times Rich List estimated his wealth at 84m. And he has acquired the trappings of a globe-trotting tycoon, including the private jet and a home in Londons Knightsbridge.
He rarely does interviews. Partly because they often revolve around his colourful past that includes a time when he was a heroin user and was twice convicted for possession. I never denied that I had two charges of possession with intent to use. But I never dealt [the drug]. Dealing is different, he said. It was a long time ago. Life moves on.
Im victim of witch-hunt, says Timis Timis barred from 60m oil flotation Indeed. Today Timis is feeling persecuted. Standing on the brink of floating what he says could be his biggest success, he wants to set the record straight, particularly about the darkest chapter in his professional history. If I slip up and you slap me, thats fine. But lets be straightforward about this. With Regal there wasnt an issue, he said. The press made it an issue.
The Regal he is referring to is Regal Petroleum, the oil company he used to run. In 2005 he stepped down amid a storm of investor fury after the companys main asset, a Greek oil field that was supposed to hold 227m barrels and was heavily promoted by Timis, turned out to be dry. The share price collapsed. Investors lost millions.
The episode led to an investigation that ended only two months ago when the disciplinary committee of the Alternative Investment Market (AIM) issued its largest ever fine, 600,000, against Regal. It found that the company, on 11 separate occasions ... failed to take reasonable care to ensure that its announcements were not misleading, false or deceptive, and did not omit material information. The head of regulation said the case was unprecedented in terms of the seriousness of the rule breaches involved and the resultant market impact.
Some might say its water under the bridge. After all, apart from an 8% stake in Regal, Timis hasnt been involved in the company since he left more than four years ago. The problem, however, was that he was getting ready to float his next venture in London African Petroleum, an oil explorer focused on Sierra Leone and Liberia.
Regulators at the London Stock Exchange were having none of it. In a highly unusual move they decided to halt the plan. Another Timis vehicle, they made clear, would not be allowed. The move was a first for the stock exchange and questionable legally.
They never called me in to see them. They still havent. As far as I know we can still go ahead, said Timis. They must think of me as some monster who eats children. Its a witch-hunt. I have always been honest with investors. Maybe we were too promotional [at Regal] but it was based on facts. I can show you the files.
No matter, he said. Mirabaud Securities, the broker to African Petroleum, has already secured $200m (125m) in investor commitments for a float in the next few weeks that will value the company at $700m. I raised that in four days, said Timis. Show me how many people can do that.
And if London doesnt want him he will go elsewhere, perhaps to Toronto or Hong Kong. Londons not the only exchange, he said, before adding with a laugh. I may buy one in Africa.
Its tempting to dismiss much of what he says as the embellished yarns of a fast-talking salesman. Numbers and valuations change from one reference to the next. The seven-page CV he provides puts a post-float valuation of $300m on African Petroleum. Thats wrong, he said. It will be $600m to $700m.
He is an engaging character, though, who tells a good story and has a roster of backers, from Goldman Sachs and JP Morgan to Macquarie, that he claims have backed him for the past 15 years. Helpfully, he provided a list that includes the mobile-phone numbers of several fund managers. Feel free to call them, he said.
And he does deliver. Last week China Railway Materials Commercial Corporation agreed to pay 153m for a 12.5% stake and rights to iron ore produced by another Timis company, African Minerals, which is developing the huge Tonkolili iron-ore mine in Sierra Leone. He invested $30m of his own money in the company in 2003 and remains executive chairman. Today it is worth $1.4 billion, making it the most valuable mining stock on AIM.
It is an impressive feat. In the next breath, however, he veers off in a direction that takes him close to the promotional territory that got him into hot water at Regal. African Petroleum owns the rights to two offshore blocks and he expects the company to acquire several other big blocks soon. Within the next six months African Petroleum will have the best portfolio in west Africa, better than [FTSE 100 rival] Tullow Oil, better than any of the giants, he declared. If even two of our seven or eight blocks work, we will be a $20 billion company overnight. The company has yet to drill a well.
Meanwhile, Timis must tend to the rest of his empire. He has a 20% stake in Cape Lambert, an Australian miner. He owns a stake in the giant port of Constantza in Romania as well as a majority share of International Petroleum, a Kazakh oil business he founded in 2005.
He claims to not give a shit about his less-than-sparkling image but part of him obviously does. Eighteen months ago he launched Franktimis.com, a website that details not only his empire but also the social programmes he funds.
African Minerals has constructed several schools in Sierra Leone and funds an annual scholarship programme for children who would otherwise not have access to an education. In November the United Nations declared the Tonkolili development to be the Most Effective Corporate Social Responsibility Project. They are good works for which he receives little credit.
Timis said he was not looking for recognition for his philanthropy. He was thinking about the next deal. People bring me opportunities because they know I take punts. I put $50m, $100m of my own money in, he said.
I am not good at spelling. I left school when I was 12. But I can count to a billion. I can make a billion too.
CFE Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
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