Regulations and Law

Corporate Governance Inquiry Launched in Parliament

The BIS Select Committee of MPs has launched an inquiry into corporate governance focussing on executive pay, directors duties, and the composition of boardrooms. That includes worker representation and gender balance in executive positions. It has been prompted by the recent comments from the Prime Minister and the Committees recent inquiries into BHS and Sports Direct where major failings were revealed in the way those businesses were run. The terms of reference for this inquiry are very broad - see this web ...

Tesco Fraud Charges, Cattles and Globo

The Serious Fraud Office (SFO) has charged three former managers of Tesco in relation to the overstatement of profits that occurred over several years and which came to light in 2014. The charges are fraud and false accounting and those charged are Carl Rogberg (finance director at the time), Christopher Bush (UK Managing Director) and John Scouler (UK Commercial Director). The former Chief Executive, Philip Clarke, has not been charged but is apparently still under investigation in relation to the offences. Neither ...

Companies House Records May Be Lost

The last ShareSoc Informer Newsletter contained an article on the ease with which one can look up the past history of company directors in the new free service provided...

The Unacceptable Face of Capitalism – BHS and National Grid

The extraction by Sir Philip Green of £300m from BHS, which led to the business going into decline and leaving the company pension scheme under-funded before he sold it for a £1 to an unqualified chancer was strongly criticised by a select committee of the House of Commons yesterday. To quote from their report: "The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism". This echoes the comments of Ted ...

Bonds, Insider Trading and New Business Secretary

The risks inherent in open-ended property funds have received a lot of media coverage of late - see my blog post of the 5th July which simply said they should be avoided. With many such funds closing so that investors could not take their money out, the risks inherent in providing liquidity to investors when the underlying assets (namely buildings) are highly illiquid have become apparent. Paul Killik had an article published in Saturday's FTMoney (16/7/2016) that made some highly intelligent comments ...

Open Ended Property Funds Should Be Avoided

Commercial property funds are popular with private investors as historically they have provided high dividends with relative price stability. But the announcement yesterday by Standard Life Investments that it had suspended trading in its UK Property Fund has further undermined confidence in the property sector after it was already depressed because of the impact of Brexit. The suspension means that investors are unable to sell their holdings. This fund, one of the largest open-ended property funds, is an "open-ended" fund - in ...

Who Caused the Stock Market Collapse? And consequences.

Who or what caused the stock market falls immediately after the Brexit vote? It was not just the UK market that fell, but many international ones plus of course the pound fell very significantly - to its lowest level since 1985. It was somewhat unexpected that the impact would be so immediate. The UK stock market has recovered to a large extent in the large cap stocks, many of which will benefit from the lower pound and a move to more "defensive" ...

Where Bonds are Concerned, Trust No-One

The news that the holders of Lloyds bonds (ECNs) have lost their legal battle in the Supreme Court reinforces the message that when it comes to investing in bonds, you should trust nobody - not the issuer of the bonds, your friendly stockbrokers and wealth managers who advise you, or the FCA to protect your interests. The bondholders won their case initially in the lower courts, that Lloyds should not be able to force redemption of these bonds at par. But after ...

AIM Campaign Comments

RBS and Pre-Packs

The FT carried a story on Saturday (11/6/2016) which was a blast from the past. It reported that Neil Mitchell, a former CEO of Torex Retail, had filed a claim in the high court against Royal Bank of Scotland (RBS), Cerberus and KPMG in relation to the sale of the company at the time it went into Administration. This case goes back to 2007 when Torex Retail got into financial difficulties after some fraudulent accounting came to light (which resulted in subsequent ...