Investors were wondering why the much-hyped backdoor listing of black sand miner JDVC Resources Corp. through listed Island Information and Technology Inc. suddenly went pfft.
On paper, IITI cited JDVC’s failure to provide the company with pertinent documents that would enable it to assess JDVC’s compliance with pertinent laws and the feasibility of business venture between the parties as the reason why the transaction did not push through.
Apparently, there is more to the story than the lack of documents. Industry sources said the real reason why the transaction did not push through was because majority shareholders of IITI could only secure less than 50 percent of the company’s outstanding capital stock to be sold to JDVC.
This is a big no-no when doing a backdoor listing, as new investors would want to get majority control of the listed company.
While IITI failed to get new investors for the company, LBC Express Inc. is looking to proceed with its backdoor listing through Federal Resources Investment Group Inc. Federal on Friday sought for voluntary trading suspension for a maximum of three business days.
“The company has just been informed by its majority shareholder that he will be disclosing something substantial that may significantly change the business prospects of the company,” IITI said.