The board of Union Alliance Media (UAM), a technology company with interests in companies providing specialist media services, has resigned, and the company`s listing on the JSE has been suspended.
UAM had a 22.5% equity stake in Nextcom, one of the unsuccessful bidders for the third cellphone licence, which was won by Cell C.
The company announced late yesterday that its bankers, FirstRand, had decided to halt the overdraft facility, resulting in UAM being unable to meet its financial commitments.
CEO Anthony Glass, Carina de Beer, Moagi Marakoane and Sue Weller, who comprised the board of UAM, resigned with effect from 5pm yesterday. Marakoane and Weller had been appointed only in December.
UAM says the resignations were as a consequence of FirstRand`s decision not to support the company any longer.
The company has declined to comment further.
UAM reported last October that it had increased annualised headline earnings per share by 25.1% in the period to June 2001.
The balance sheet showed an overdraft of R19.11 million. Current liabilities of R37.72 million exceeded current assets of R35.5 million.
UAM said later in its annual report that "certain irregularities had been identified within the franchise division of its 81% held subsidiary, Twilight Advertising and Entertainment Channel, trading as Q4 media" and announced that the division would be closed.
A profit warning was issued early this year, in which the company said it had subsequently learned that the irregularities had affected Q4`s entire operation to the extent that it was to be put into liquidation at the insistence of Q4`s bankers.
The company warned shareholders to be cautious in their share dealings until the full impact of Q4`s liquidation "together with the quantification of the difficult trading conditions experienced by the group in respect of the six-month period ended 31 December 2001 have been finalised".
The move raised shareholders` hackles, as they claimed that they had been told at the group`s annual meeting a month before that there were no problems at the company.
They also complained that changes in the number of issued shares had not been explained.
The Cell C and Nextcom consortiums announced last June that they had reached a commercial settlement to the court case challenging Cell C`s right to become the third cellular operator in SA.
While the details of the settlement were never disclosed, it was rumoured that the Nextcom consortium was to receive about R80 million.
Shareholders have been left in the dark as to the status of the share due to UAM.
The company has said in the past that an announcement on or about 15 February would make everything clear.
An analyst says the company has been the victim of "bad business decisions" and a lack of a clear strategy.
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