Insolvency and Administration

Slater Investments Warns on Pay, and Flybe Bail-Out

Slater Investments has issued a warning to companies of their “dissatisfaction with the framework of directors’ remuneration in most public companies”. Slater Investments run a number of funds managed by Mark Slater and others with a focus on growth companies. The letter complains about a “relentless ratcheting of terms and conditions which have meant the interests of directors and investors have grown steadily further apart”. Specifically it complains about the award of nil-cost options which they see as a one-way bet and ...

De La Rue, Excessive Debt, Victoria and Link’s Debt Monitor

Link Asset Services have issued a note pointing out that De La Rue (DLAR) has net debt that now exceeds its market cap. The high debt in the company and recent falling revenue no doubt accounts for much of the recent fall in the share price, although the report of an investigation by the Serious Fraud Office (SFO) cannot have helped. But if you read the last interim report which was issued a couple of days ago, there are lots of ...

GB Group, Patisserie Holdings, FRC Stewardship Code and Halma

The stock market seems to be in limbo as business waits to see the outcome of Brexit politics. In my portfolio, small cap companies are drifting down and even large funds and trusts have been declining. Is this due to currency effects or the realisation that “star” fund managers such as Neil Woodford cannot be relied upon? Others are just bouncing around. However there was one exception yesterday when GB Group (GBG) jumped 14% after a positive trading statement. That company ...

Another Update on the SVS Special Administration

Since my last update, there have been several significant developments: Leonard Curtis have published a "Statement of Proposals", setting out their plans for returning client money and assets A creditors' meeting has been held and a creditors' committee has been appointed Scammers have been trying to defraud SVS clients Another firm, Reyker Securities, enters special administration   Avoid the Scams Sadly, in cases like this, scammers will often prey on the worries of clients of failed firms, suggesting that clients might lose all or ...

An Update on SVS Securities

On 5th August the FCA announced that broker SVS Securities had entered Special Administration. Once again, as in the case of Beaufort Securities, this is a situation that will cause great concern and, at a minimum, some inconvenience, for SVS clients. Whilst a firm is in special administration, clients are not able to trade securities held on their behalf, or access money held on their behalf, including dividend payments. It is disappointing that it has taken until 12th September for clients to receive ...

Grant Thornton, Interserve and Arc Fund Management

The Financial Reporting Council (FRC) have announced an investigation into the audits by Grant Thornton of the accounts of Interserve (IRV) in the years 2015-2017. Interserve was a large outsourcing company with most of its business from Government contracts. It ran out of cash and went into administration on the 15th March with debts of £738 million. Readers will no doubt be aware that Grant Thornton were also the auditors of Patisserie Holdings and Globo, both cases where very substantial fraud ...

Debenhams PrePack, Dunelm Trading, ASOS and Privacy

Department store operator Debenhams (DEB) has been put through a pre-pack administration. It’s been bought by a new company formed by its secured lenders. Mike Ashley of Sports Direct is furious. His company invested £150 million in the shares of the company in the hope of taking it over, which will now be worthless. He had some choice words to say on the subject which included that it was an “underhand plan to steal from shareholders”, “as normal politicians and regulators ...

Patisserie and Interserve Administrations, plus Brexit latest

Yesterday the administrators (KPMG) of Patisserie (CAKE) issued their initial report. It makes for grim reading. The hole in the accounts was much worse than previously thought with an overstatement of net assets of at least £94 million. That includes: Intangible assets overstated by £18m; Tangible assets overstated by £5m; Cash position overstated by £54m; Prepayments and debtors overstated by £7m; Creditors understated by £10m. The accounts were clearly a total fiction. It is uncertain whether there will even be sufficient assets ...

Interserve Administration: I am very angry!

I attended Interserve's General Meeting today and I am... ...angry with major shareholders, who didn't hold the board to account and couldn't be bothered to speak or vote today. ...angry with former board members who, in my opinion, did not properly exercise their corporate governance responsibilities. ...and angry with former executives who drove the Interserve ship onto the rocks... and were still well-rewarded. In short, a massive failure of corporate governance and corporate stewardship. Those responsible should hang their heads in shame. Government should consider ...

Inconvenient AGM at Phoenix, Changes to “Going Concern” and GoCompare

I have been advised that life insurance and pension consolidator Phoenix Group (PHNX), a FTSE 250 company, is holding this year’s AGM in Edinburgh at 9.00 am. That’s a damn inconvenient time and location for most investors. Previous general meetings have been held in London where their registered office is located, although I am told that only one director and no shareholders turned up for the 2018 AGM. This is the explanation given by the company for the latest venue in the ...