Umuthi Healthcare Solutions PLC v The Financial Conduct Authority

An application to extend time for a regulatory reference requires a contextual assessment of the delay, its explanation and all the circumstances. A short delay may still be serious in a market-regulation context, but an extension may be just where the reference is not hopeless and the delay causes little litigation prejudice.

Under Rule 5(5), suspension of a supervisory notice requires the applicant to satisfy the Tribunal that suspension would not prejudice the persons or market protected by the notice. For a notice discontinuing a listing, those persons include existing and potential investors. Persistent failure to publish required financial information can itself create a significant risk beyond the ordinary risks of investment and justify refusal of suspension.

The Financial Conduct Authority issued a First Supervisory Notice under section 77(1) of the Financial Services and Markets Act 2000, discontinuing Umuthi’s standard listing with immediate effect. The shares had already been suspended for over 12 months. The FCA relied principally on missing financial reports, uncertainty about the supply and allocation of shares, and concerns about the company’s systems, controls and co-operation.

Umuthi referred the notice three days after the 28-day deadline. It sought both an extension of time and, under Rule 5(5) of the Tribunal Procedure (Upper Tribunal) Rules 2008, suspension of the notice pending determination of the reference. The central issues were whether time should be extended and whether reverting the shares to suspended status would risk prejudice to investors or market integrity.

1. The application to extend time was granted. Applying the three-stage approach in Martland v HMRC [2018] UKUT 0178 (TCC), the Tribunal assessed the length of the delay, the explanation, and all the circumstances. A three-day delay was at the threshold of seriousness in this market context. Investors had a legitimate interest in certainty that a discontinued listing had become final after expiry of the reference period.

   Umuthi’s explanation, that it had treated the period as business days, was poor. It should have consulted the applicable Rules or sought advice. Nevertheless, the short delay caused no significant litigation prejudice and the reference was not hopeless. Although the challenge concerning absent financial information was weak, factual findings on the disputed share register and shareholder complaints might affect whether the FCA’s decision was within the range of reasonable decisions. The balance therefore favoured an extension to 5 August 2022.

2. The suspension application was refused. Rule 5(5) required Umuthi to establish that suspension would not prejudice the persons or market protected by the notice. The Tribunal applied Sussex Independent Financial Advisers Limited v FCA [2019] UKUT 228 (TCC), adapted to a listing-discontinuance notice.

   The protected class included not only existing shareholders but potential investors, since suspended or discontinued shares could still be traded privately. The risk inquiry concerned a significant risk beyond the normal risk of investing in listed shares.

3. The First Supervisory Notice disclosed a case for Umuthi to answer. Missing financial information, uncertainty over share supply and ownership, governance deficiencies, and a suspension lasting over 12 months were each capable of constituting special circumstances precluding normal regular dealings under section 77(1) of the Financial Services and Markets Act 2000.

4. However, the continuing failure to publish required financial information created a significant risk to existing and potential investors and to market integrity. Audited public information was essential to proper price formation and could not be replaced by management’s unaudited accounts. Reverting the shares to suspended status would suggest that non-compliance with continuing listing obligations could be tolerated indefinitely. That conclusion was sufficient to refuse suspension; no definitive finding on the disputed share register was required.

5. Umuthi was directed to file its Reply to the FCA’s Statement of Case within seven days of the decision’s release.

not stated in the judgment.