Regulations and Law

B&B Finance Director fined

Christopher Willford, the Finance Director of Bradford & Bingley in 2008, has been fined £30,000 by the Financial Conduct Authority (FCA) for "failing to provide the board with up-to-date information about B&B's financial position" ahead of the right issue in May of that year. The FCA state that Mr Willford "failed to identify and investigate potentially material risks, or alert the board, at a crucial time for the firm. Bad mortgage debts, arrears and repossessions had all risen while the net interest ...

The Chancellor’s Autumn Statement – What’s in it for investors?

You may well be worse off if you are dead. The Government is to clamp down on the payment of state pensions to people who are dead, which is apparently a particular problem when they move overseas upon retirement.Otherwise these are come of the changes and how they may affect individual investors:- As expected, there is to be a restriction on Venture Capital Trust (VCT) "enhanced share buy-backs" upon which there was a recent consultation. In future VCT investments that are ...

FCA Consultation on Crowdfunding

The Financial Conduct Authority (FCA) is consulting on a new regulatory approach to cover "crowdfunding".  Crowdfunding is in essence a direct approach to investors for either equity investments in early stage companies, or loans to similar companies. It has become popular of late due to the emergence of various web-based platforms to collate the interests of many small investors, but can also be employed by companies to make direct approaches to investors. ShareSoc looked at one of the latter examples (Clear ...

RBS, Hibu and the unacceptable face of banking

There have been extensive media comments lately on the activities of the Royal Bank of Scotland in lending to smaller businesses, and what they did when those businesses got into financial difficulties. The articles printed focussed on two reports on the activities of RBS - a report commissioned by the bank by Sir Andrew Large, and one by Lawrence Tomlinson* who acts as a consultant to the BIS Department. Both reports, but particularly the latter one, were quite damning about the ...

Why should investors not see performance fee details at Northern VCT?

Northern Venture Trust (a VCT) introduced a management performance fee at a General Meeting on the 18th July. They did not have one before even though they had outperformed the very similar Northern 2 VCT over the last ten years who do. I spoke against the introduction of such a fee at the General Meeting, and raised questions about how the fees were to be calculated, as did another shareholder. The calculations were not at all clear from the meeting notice. As ...

Great news – real company owners to be disclosed

The Prime Minister has announced that the details of who really owns and controls UK companies will be made publicly accessible. More details will be announced in early 2014,, but the key paragraph in the announcement from the BIS Department includes the statement that the Government will “………potentially use as a model the disclosure regime that currently applies in relation to disclosure of information on company shareholders. This would mean that companies would hold information on the names and addresses of ...

Bulletin boards and Globo

I was at the Annual General Meeting of Ideagen yesterday (a full report is here), and happened to talk to one of the advisors present about recent events at Globo, another software company. We agreed there was a problem with bulletin boards that should be tackled. As mentioned in a previous blog entry, Globo has come under attack in the last few days on a number of bulletin boards and financial blogs for the quality of its business and its accounts (more ...

Trusting the regulators? You should not.

The recent case of Catalyst Investment Group highlights the fact that sensible investors should not rely on the financial regulators to warn them about dubious investments and those who promote them. Indeed so far as the FCA, and its predecessor the FSA, is concerned, the fact that a business is regulated by them does not necessarily mean they are trustworthy at all. All it means is that they have met the regulatory requirements at some point in the past.The recent outrageous ...

Takeover panel rule change – foreign companies now covered

A little reported change to the Takeover Panel Code that took effect today will strengthen the rights of shareholders significantly. In future those companies that are registered in the UK but have their operations overseas will be bound by the Code. Previously they were not. So for example, AIM companies such as Globo (operations in Greece) or Pan African Resources (operations in South Africa) will now have to comply with the Takeover Panel Code. The Takeover Panel Code helps to protect the ...

Transparency and Trust – Consultation Response Submitted

ShareSoc is submitting a response to the BIS Discussion Paper on “Transparency & Trust” which can be read here:  www.sharesoc.org/Transparency_&_Trust_ShareSoc_Response.pdf . This wide ranging consultation is on a number of proposals to tackle many problems in the modern corporate scene, with a particular focus on tax avoidance and money laundering. Knowing who controls and owns companies is one of the concerns, but it also aims to tackle incompetent and fraudulent directors. A summary of the key points ShareSoc made in our ...