Company News

Naibu suspended

On Friday (9/1/2015) the shares of Chinese clothing company Naibu (NBU) were suspended  at the request of the non-executive directors "pending clarification of its trading position". The CFO had resigned on the 31st December and the trading update on the 24th November hinted the dividend might not be paid and profits reduced. The best comments on this event were probably those of Paul Scott who writes for Stockopedia. He has been consistently critical of Chinese companies listed on AIM and his words ...

Charles Stanley loses Finance Director

Charles Stanley announced yesterday (9/1/2014) that its Finance Director James Rawlingson was "leaving with immediate effect".  This follows the appointment of a new CEO in December after the publication of a dire set of half year results at the end of November. Funds under management were static and revenue from the Financial Services Division and platform Charles Stanley Direct were up substantially but higher costs resulted in a loss before tax of £3.9 million. The dividend was maintained at the half ...

Lloyds Banking Group ECN Scandal

Lloyds Bank issued Enhanced Capital Notes (ECNs) as part of its refinancing during the banking crisis. These were taken up by many retail investors. They were convertible bonds that the bank has the right to convert to equity or buy back if its core capital falls below a certain level. During recent Bank of England stress test, regulators ruled that the bonds no longer constituted part of the bank’s capital, triggering the possibility of redemption which Lloyds Bank is proposing to ...

Ignoring the UK Corporate Governance Code

Last week there were Annual General Meetings of the Baronsmead 1 and 2 VCTs (BDV and BVT) and the British Empire Securities and General Trust (BTEM) on the same day. These companies are all investment trusts although the latter is of course somewhat different in nature to the two Venture Capital Trusts. They do have one thing in common though - they both claim to be able to report against the AIC Corporate Governance Code rather than the UK Corporate Governance ...

Law suits – Quindell, Lloyds, RBS and SIPPs

Feel misled by the Quindell board and its advisors? Then there is a new legal action being formulated by Liverpool legal firm "Your Legal Friend". They already claim to have 250 investors interested in pursuing a claim on the basis that statements issued by the board and its advisors show that insufficient care had been taken in relation to the duty of care owed to investors.  At least that's a brief summary of the allegations - see their web site for ...

Two more AIM Exits – Ludorum and Armour Group

Two more departures from AIM were recently announced - Ludorum (LUD) and Armour Group (AMR). Ludorum have been developing a market for their animated children's TV series based on Chuggington trains and associated consumer products. But revenue has never really taken off as investors hoped. Along with the interim results announced on the 15th December (again somewhat disappointing), the company announced a proposed delisting from AIM.  These are the reasons given in the announcement: The factors taken into consideration by the Directors in ...

BP and Shell facing climate change resolutions

Both BP and Shell are likely to face resolutions at their next AGMs which will raise the issue of climate change. A coalition of investment groups including ShareAction and the Local Authority Pension Fund (LAPF) are looking for signatories to a requisition for a resolution to require more reporting by these companies on various aspects of their approach to carbon reduction and emissions management. See http://www.lapfforum.org/news/co-filers-sought-for-2015-shell-and-bp-agm-resolutions for more information. Comment: Some investors feel that the Annual Reports of such companies are already ...

AIM delistings – Security Research and Rethink

Delistings of AIM companies always distress investors. Out of the blue your shares in a company can drop in value very substantially, and you can be left holding an unsaleable stock. Two recent announcements of delistings have been Security Research (SRG) and Rethink (RTG). These are both companies with patchy trading histories and low market capitalisations (£9m and £5m respectively after the announcements). It requires a vote of 75% of shareholders to approve delisting. In the case of Security Research the General ...

ShareSoc Welcomes BG Group Decision but calls on Sir John Hood to Resign

ShareSoc is delighted by today’s news that BG Group has decided to withdraw the conditional share award that was proposed for new CEO Helge Lund. This is a good illustration of active shareholders being able to influence corporate policy and restrain abuses. However, today’s announcement, including acceptance by Mr Lund of the revised terms, clearly demonstrates that the original proposal was excessive and unwarranted. It is obvious that insufficient consultation with shareholders had been conducted before the proposed package was announced, as ...

Bradford & Bingley & Northern Rock Bond Tenders

Bradford & Bingley Plc have announced a new tender offer for the subordinated bonds. These are what were formerly called PIBS which were issued before the company converted to a bank. These bonds remained outstanding when the company was nationalised in 2008 and have continued to be listed and tradable. But the previous tender offers were not considered very generous, although the market price has been slowly recovering on the expectation that the mortgage assets of the company would exceed its ...

Tesco Legal Action – or should we just “put our hands up”?

Law firm Stewarts Law has announced that it is preparing a case against Tesco based on the losses of investors in the company from the overstatement of profits. To quote from their announcement: "The Claim will allege that directors and senior management knew or were reckless as to whether Tesco's statements to the market were untrue or misleading and/or dishonestly concealed the true position, in breach of the Financial Services and Markets Act". They don't intend to await the results of ...

British Empire – moving the goalposts?

Last year ShareSoc published an extensive report on the Annual General Meeting of British Empire Securities and General Trust. This is a long established investment trust which in the long term has achieved good performance figures, but in recent years has not been doing so well. Indeed our report suggested shareholders were becoming restless bearing in mind the comments of some investors at the AGM. For example, in the year to the 30th September 2013, the Trust achieved a total return of ...