This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Aviva Preference Shares: Write to your MP!

Please write to your MP requesting that a Parliamentary Select Committee investigate Aviva’s action. The Financial Times published a joint letter from Peter Parry of UKSA and Cliff Weight of ShareSoc, highlighting our concerns.

The suggested wording of a letter/email to your MP is as follows

“Dear xxxx,

A Parliamentary Select Committee should investigate Aviva’s actions which have sullied the reputation of the London Stock Exchange and may cause financial losses running into billions for many individuals. The issues are highlighted in a joint letter to Financial Times from Peter Parry of UKSA and Cliff Weight of ShareSoc, published on 20 March 2018.

The best outcome would be for Aviva to announce that if they repurchase their irredeemable preference shares, they will do so at the market price or an average of the market price in the month(s) before they made their announcement.

Your sincerely,”

You can find details of your MP’s name and email address at this webpage www.parliament.uk/mps-lords-and-offices/mps/

Mark Taber has written extensively on this issue and deserves to be congratulated for what he has done. He has started a Campaign Action Group and has achieved engagement with both Aviva and the FCA. Those wanting to read more about this may wish to look at his website https://www.fixedincomeinvestments.co.uk/fixed-interest-blog/aviva-general-accident-preference-shares-campaign-information/

ShareSoc and UKSA have also written to both the FCA and FRC that they investigate Aviva.

Cliff Weight

PS: For those who do not have access to FT.com, below is the text of the letter we wrote to the Editor.

“Sir, Individual shareholders are deeply upset and appalled at the reckless and cavalier announcements by Aviva about the possible repayment of irredeemable preference shares (200 million issued by Aviva and 250 million by General Accident). Not only did the Aviva preference share price drop from 170p to 120p, but the whole asset class suffered a 25% fall as a consequence of the announcement.

To suggest that it is acceptable to use an obscure loophole to repay irredeemable high-coupon securities at or near their par value is highly immoral, and to make such an announcement in the full knowledge of the likely market impact is completely irresponsible.

The news that the FCA are investigating is welcome. But the issue is wider. The Board of Aviva need to explain themselves. A Parliamentary Select Committee should investigate.

This type of behaviour should not be allowed to sully the high esteem in which most of our UK institutions are held.

It is the clearly established principles that are the foundations of the wonderful reputation of the London Stock Exchange. They make it pre-eminent in the world. Investors and shareholders need to feel that can sleep safely in their beds in the knowledge that their rights will not be stolen for the convenience of others. Both institutional and individual investors need to shun institutions that are prepared to behave in such a disingenuous manner.

Cliff Weight, ShareSoc

Peter Parry, UK Shareholders’ Association”

 

One comment
  1. MrContrarian (@MrContrarian) 22nd March 2018 at 9:32 am

    “The best outcome would be for Aviva to announce that if they repurchase their irredeemable preference shares, they will do so at the market price or an average of the market price in the month(s) before they made their announcement.”
    Did you mean to say cancel the prefs, paying the market price to holders? They can repurchase prefs in the market any time and always by definition at the market price.
    The devil is in the detail here.

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