Press | Vox Markets
Investors demand change at Imperial Brands (IMB). Big shareholders push for new leadership and for parts of tobacco business to be sold
London Stock Exchange Group (LSE) needs to beat Bloomberg at its own game. Schwimmer is betting on Refinitiv and financial data revolution to unseat incumbent
Dart Group (DTG) on target to propel Jet2 further. Unlike its rivals, the travel group ended the year with a cash surplus
National Grid (NG.) had evidence that the shift to renewable energy was putting Britain’s electricity supply at risk months before the biggest blackout in a decade, The Mail on Sunday can reveal. The company, which is responsible for keeping the lights on, has downplayed the role of wind energy in the power cut that caused widespread chaos earlier this month. John Pettigrew, chief executive, described the outage as a ‘once-in-30-years’ event and said there was ‘nothing to indicate there is anything to do with the fact that we are moving to more wind or more solar’. Yet in April, National Grid published research warning that using more renewable power sources posed a threat to the network’s ‘stability’. In a report based on a £6.8 million research project, National Grid admitted that renewables increased the ‘unpredictability and volatility’ of the power supply which ‘could lead to faults on the electricity network’. -The revelations come as energy regulator Ofgem and the Government continue to investigate the causes of the blackout.
Standard Chartered (STAN) is facing a further blow to its reputation as the Treasury prepares to slap it with a £10m fine over sanction breaches. The bank, which has already been fined over £800m this year following US and UK probes into alleged breaches of sanctions against Iran, has been told to expect the penalty from the Office of Financial Sanctions Implementation (OFSI) in the coming weeks. The proposed fine comes at an awkward time. The bank is about to embark on an investor roadshow aimed at patching up its relationship with shareholders following a row over its chief executive’s pay and is also trying to clean up its reputation following a string of legal issues. Earlier this year the Financial Conduct Authority gave it a £102m penalty, the City watchdog’s second-largest ever fine for money laundering, after it found “serious and sustained shortcomings” in the bank’s anti-money laundering controls. The emerging markets-focused bank also agreed to pay $947m to US agencies earlier this year to settle allegations that it helped Iran and other sanctioned countries launder money.
National Grid (NG.) is routinely restricting the use of its own power cables from the Continent because of the risk of blackouts if they failed. Britain’s electricity system is sufficiently fragile at certain times of day that if one of the subsea “interconnectors” tripped while importing at full capacity, it could trigger power cuts like those of August 9. A senior National Grid source told The Times that for several years it had been managing this risk by limiting the use of the cables at these times, especially overnight, so as to reduce the size of the potential supply shock. They said that the costs of doing so, which are understood to run to many millions of pounds, were cheaper than paying for enough back-up to withstand a potential failure. The disclosure of the arrangement, described by one analyst as “perverse”, raises questions over how National Grid manages supplies and over its plans to spend billions of pounds building more interconnectors.
Highly sensitive personal data, including banking details of more than 1,600 Natwest customers, has been left in a former employee’s home for more than a decade because the bank has been unable to reach an agreement on the safe return of the information. Royal Bank of Scotland Group (RBS) has not alerted affected customers to the serious data breach because it does not know exactly what information its former worker holds. Anonymous examples seen by The Times suggest that the information includes account and sort codes, credit card details and people’s account histories, including direct debits, as well as their names, addresses, relationship status, occupation and phone numbers.
Sainsbury (J) (SBRY) has played down talk that it has launched a formal hunt for a new chief executive to replace Mike Coupe as three insiders jumped to the top of the list of possible candidates. The future of Mr Coupe has come under a cloud since an audacious proposed merger with Asda was blocked by the Competition and Markets Authority in April. Despite winning plaudits for his acquisition of the Argos catalogue chain in 2016, and being overwhelmingly re-elected by shareholders last month, there has been persistent speculation that the surprise failure of the Asda deal would cost Mr Coupe his job. In a report that was flatly denied by the retailer, The Sunday Telegraph said that John Rogers, who runs Argos, Simon Roberts, director of retail and operations, and Paul Mills-Hicks, commercial director of food, were being lined up as potential frontrunners.
Persimmon (PSN) is on track to make another £1 billion in profits this year despite being criticised for providing substandard homes. The company was rocked by a scandal over a £75 million bonus for disgraced former boss Jeff Fairburn, has defied the housing market slowdown and is this week poised to report £500 million in pre-tax profits for the first six months of the year. But smaller firms are struggling to compete in a housing market which has ground to a halt. The Mail on Sunday can reveal that in recent days a smaller luxury housebuilder, Newcourt Residential, collapsed after facing ‘severe cashflow issues’.  Persimmon has failed to shake off concerns about the quality of its homes amid anger over multi-million pound bonuses for its executives and senior managers since it became the first housebuilder to make £1 billion in profits last year. Last week, the company launched a consultation with customers, employees, suppliers and councils to try to improve its damaged reputation. City analysts expect Persimmon’s margins – currently around 30% – to slide as it spends more money on its homes.

The chairman of Saga (SAGA) has confronted a powerful activist investor who is trying to break up the company. The Mail on Sunday can reveal that Saga boss Patrick O’Sullivan has held crunch talks with Elliott Advisors since it bought a 5% stake in the company a month ago. The US activist – renowned for its ruthless boardroom tactics – snapped up the stake after a major profit warning made Saga’s shares plunge 37%. Elliott is understood to want Saga to split its travel and insurance businesses. However, analysts are not convinced that a break-up would be a good move for Saga. Edward Morris, from JP Morgan, pointed out that Saga benefits from selling multiple products under one brand. He warned that the travel and insurance divisions may be less valuable as individual companies.

A mystery predator is said to be circling Britain’s biggest estate agent. City sources said a potential buyer is weighing an offer for Countrywide (CWD), the company behind Hamptons International, John D Wood & Co. and Bairstow Eves. Prior to floating on the stock market in 2013, Countrywide was owned by US private equity firms and hedge funds. Apollo, the Wall Street private equity titan led by Leon Black, paid £1 billion for Countrywide at the peak of the credit boom in 2007. Eighteen months later, the company’s lenders – which included US distressed debt fund Oaktree Capital – took control of the estate agent via a financial restructuring. They floated Countrywide at £3.50 a share six years ago, valuing the business at £750million. The firm is now valued at just £78million, partly due to the tough times the industry has had since the referendum. A takeover bid for Countrywide would be a huge ‘contrarian bet’.
The bosses of Burford Capital (BUR) were last night facing questions about how much money they have extracted from the embattled legal firm as they fight back against allegations that they misled investors over its financial health. The litigation finance company, which has come under heavy attack from American hedge fund Muddy Waters, refused to say how much it had paid chief executive Christopher Bogart and chief investment officer Jonathan Molot since 2012. However, The Mail on Sunday can reveal that the pair made £15 million in fees in the three years prior to that from advising the main listed company over which legal cases to finance. In 2012, they also received shares worth £200 million at today’s price in an ownership shake-up. They sold some of them for nearly £120 million last year.
Property tycoon Robert Tchenguiz has built a substantial shareholding in FirstGroup (FGP) in a move reminiscent of his time as a buccaneering corporate raider in the run-up to the financial crisis. Tchenguiz now owns a 3.2% stake in the embattled bus and rail company, which last week won the West Coast rail franchise in partnership with Italy’s Trenitalia. Before the 2008 crisis, he was one of Britain’s biggest activist shareholders, known for agitating for corporate shake-ups and launching takeover bids – in 2006 Tchenguiz’s investment vehicle R20 attempted a debt-backed £4.6 billion takeover bid for All Bar One owner Mitchells & Butlers.
MIDAS SHARE TIPS: Recession fears, stock market wobbles and investors rushing to find a safe haven – could be worth a look? Midas verdict: Mark Twain allegedly described a gold mine as: ‘A hole in the ground with a liar standing on top of it.’ Sadly, too many mining firms seem to fit that description. Pure Gold, however, is made of better stuff. The mine exists, the money is there to build it and the company is run by highly experienced industry veterans. The group also counts mining giants AngloGold Ashanti and Newmont Goldcorp as shareholders. The shares are 41p and should go higher as Pure Gold moves towards production. Buy.
Sainsbury (J) (SBRY) is kicking-off the search for a new chief executive to replace Mike Coupe as it looks to move on from its failed attempt to merge with Asda. The grocer has set the wheels in motion internally for a succession plan, according to two sources. Three internal candidates have been tipped for the top. They are John Rogers, the boss of Argos, Simon Roberts, its retail and operations director who used to run Boots UK, and Paul Mills-Hicks, the food commercial director. Sainsbury’s is due to conduct a thorough external search.
Berkeley Group Holdings (The) (BKG) attempt to placate anger about its sky-high bonuses has run into trouble as an influential City adviser has called for its new pay policy to be voted down. Glass Lewis has told its members that the housebuilder’s decision to do away with an annual bonus while extending the length of its long-term incentive plan (LTIP) could encourage bosses to focus on returning cash to shareholders rather than investing for the future. It also raised concerns that targets for the LTIP, which paid out a combined £23m to seven bosses last year, were not tough enough, and the decision to let shares banked by bosses vest over an extra two years compared with the previous plan. Investors will have a change to block the new policy in a binding vote at Berkeley’s AGM next month. Berkeley has already capped the annual amount bosses can take home at up to £8m following outrage over a combined payout of £92m in 2017. The Investment Association, another adviser, has backed the proposals.
One wealthy backer of Simba, the online mattress seller, couldn’t contain his excitement about the start-up’s prospects in May last year. “I fundamentally believe that Simba will deliver a boatload of cash to all investors,” he said. Simba’s arch rival Eve Sleep PLC (EVE), which offers much the same product, a foam mattress in a box, was dismissed. “Simba s—- all over Eve, who are public,” said the investor. Yet the two companies, launched a year apart, are now in “early stage” talks to merge. Rather than a triumph of one side over the other, the possible tie-up is a defensive move that tells of two sets of disappointed shareholders. The two firms have argued that a deal could improve their buying power and cut costs, a pro-consumer claim relied upon by Asda and Sainsbury’s as they unsuccessfully attempted to convince competition watchdogs to allow their merger. “Merging is the only option to ensure their long-term survival. It’s the first domino to fall in the consolidation of the market as the high marketing costs force many of the smaller brands to merge or fold,” says Matt Walton, a retail analyst at GlobalData. Eve and Simba could face similar scrutiny under current competition rules. “There is significant overlap, with similar features in their hybrid mattresses, trial periods, warranties and delivery. Indeed, the main difference between the two are the physical retailers they partner with and a wider range and price architecture at Eve,” Walton adds. The cost efficiencies might squeeze suppliers as well as hurt some staff, who face the axe if the two brands become one, which is the current plan, according to one insider.
Questor: emerging markets may no longer excite us but they are key to Unilever’s future. Questor share tip: growth rates in India and China still dwarf anything seen in the West and Unilever (ULVR) is nicely positioned to benefit. Buy
The owner of Paddy Power and Betfair has been accused of lavishing trips to football games and the Grand National on a gambling addict to encourage him to bet more. Flutter Entertainment (FLTR) allegedly targeted property investor Antonio Parente even though he had asked to be banned from Betfair for life. It also deposited £20,000 in his account to get him to bet more, say court filings. Flutter is being sued in the High Court by a former business associate of Dubai-based Parente, who claims he is owed £942,135. Amarjeet Singh Dhir alleges that Parente stole from him to feed his habit. The case comes as Britain’s biggest betting firms face increasing pressure to prove they are tackling problem gambling. Last month, Ladbrokes owner GVC was fined £5.9m by the Gambling Commission for failing to prevent money laundering and problem gambling.
Two leading wealth managers are in talks over a merger that would create a powerhouse managing assets of £45bn. Tilney, bought by private equity firm Permira from Deutsche Bank five years ago, has entered negotiations to snap up its 140-year-old competitor Smith & Williamson and nearly double its assets under management. The possible acquisition comes two years after listed wealth manager Rathbones tried to buy the privately owned S&W. Tilney tried to gatecrash the bid, but failed. Rathbones’ move on S&W then fell apart, too. A merger would propel Tilney into the top five British wealth managers by assets, and would broaden its offering to include tax advice and other financial-planning services provided by S&W through its accountancy arm.
American regulators have been handed claims of market manipulation in the trading of shares in litigation funder Burford Capital (BUR). The US Securities and Exchange Commission and the Department of Justice were passed details of alleged share manipulation minutes before short-seller Muddy Waters released its dossier on Burford this month. The damning report wiped 66% from Burford’s shares, although the stock has recovered slightly and now trades 40% lower than its level before the attack. Burford, which hopes to list in America, issued a statement last week saying it had identified “evidence consistent with illegal market manipulation”. It said that in the three minutes and 48 seconds before Muddy Waters named Burford as its latest target on Twitter, 578,112 “sell” orders on its shares were placed at below market value and then cancelled — a phenomenon known as “spoofing”. It said it had also identified “layering”, where sell orders are placed above market value and then cancelled, giving the impression that a high volume of shares is for sale.
American anti-virus software developer McAfee is suing Dixons Carphone (DC.), accusing the retailer of flouting an agreement to promote its products and instead marketing those of a rival, which it claims will cost more than £30m in lost sales. McAfee has issued a High Court writ against the chain for allegedly breaching a deal where its software would be exclusively marketed as an add-on purchase for customers who bought a computer, tablet or smartphone. It claims that since April, Dixons Carphone has run a deal with Symantec, the New York-listed cybersecurity outfit, to promote its software to customers as add-ons. McAfee claims this is “inconsistent” with its own agreement with Dixons Carphone.
BT Group (BT.A) new boss is selling more than £100m of telecoms infrastructure in Holland as he simplifies the group. Philip Jansen wants to offload towers and broadband cables connecting BT’s Global Services Dutch business customers. The former Worldpay boss is dropping fringe units and sharpening BT’s focus on carpeting Britain in ultra-fast broadband. This includes selling its £80m Tikit legal software business and Global Services’ presence in Ireland, Latin America and Spain. Jansen is looking to sell some Global Services infrastructure, but was not “pulling out of specific countries altogether”.
The former boss of Majestic Wine (WINE) is set to return to the retailer he left two years ago as it enters new ownership. John Colley has resigned from his role as chief trading officer at Kingfisher, the DIY conglomerate, after just 20 months to return to Majestic, whose stores were bought for £95m this month by the American investment firm Fortress. Colley advised Fortress on its acquisition. That deal separated Majestic from its sister business, Naked Wines, the online subscription service set up by Rowan Gormley. Naked Wines is still run by Gormley and is tipped to seek a New York listing. Majestic made underlying earnings of £11.3m on sales of £267.6m from its 200 stores in the year to April. Colley’s move is his fourth in four years. He spent two years at Majestic — leaving amid rumours of a falling-out with Gormley — to become chief executive of the arts and crafts retailer Hobbycraft, where he lasted eight weeks before joining Kingfisher, owner of B&Q and Screwfix.
CYBG (CYBG) is braced for a fresh hit from payment protection insurance, piling more pressure on its share price — down by nearly a third over the past few weeks. Shares in the London-listed bank, run by David Duffy, have plunged from about £2 towards the end of July to 142p as the lender fights fierce competition in the mortgage market and uncertainty over Brexit. Analysts expect the bank to take a hefty provision for PPI, possibly £100m, when it presents full-year results in November. In July, CYBG reported “a recent increase in PPI information requests”, saying it would “determine its final costs” after the PPI claims deadline at the end of this month. The scandal has cost banks more than £35bn. “They’re definitely going to have to pump up PPI provisions,” said analyst John Cronin at the stockbroker Goodbody.
Standard Chartered (STAN) faces a multimillion-pound fine from the Treasury for failing to prevent sanctions breaches, in another setback for chief executive Bill Winters. The Office of Financial Sanctions Implementation (OFSI) has told the emerging markets bank that it is planning to impose a penalty of more than £10m, according to Sky News. The impending fine deals another blow to Winters, 57, whose outsized pension payments have caused a row with investors.
Rathbone Brothers (RAT) is a marauding hunter. Fiercely independent, the wealth manager, valued at £1.2bn, is on the prowl for deals. The need to hunt down other targets is pressing. Its discretionary wealth management arm is a mature business and new organic growth is hard to come by, with net fund outflows of £100m in the first half of the year. Profit margins are at the upper end of the industry scale, but there is little room for manoeuvre. The wealth management space has become crowded; Rathbones’ rivals include Brooks Macdonald, Charles Stanley and Brewin Dolphin. Rathbones is well-placed for further acquisitions under its new management team, with analysts lauding the appointment of Jennifer Mathias from EFG Private Bank as the new finance boss. The market is waiting for a “strategy refresh” from the new top team, including chief executive Paul Stockton, who was promoted from finance director in May. Analysts at Shore Capital said he must “deliver a credible plan to re-stimulate organic growth”.Rathbones may be one of the predators, but questions hang over growth prospects as Brexit bites. Hold.
An agency staffed by ex-CIA spooks is helping short seller Muddy Waters probe alleged “significant deception” by bosses at Burford Capital (BUR), the litigation funder it has accused of misleading investors. The US firm led by Carson Block claimed behavioral analysis run by a third-party agency, Qverity, had shown that Burford’s management was “deceptive in their written and verbal responses” to its initial report last week. Qverity is run by former US Central Intelligence Agency (CIA) staff who co-authored the books “Spy the Lie” and “Get the Truth”. Mr Block is also a published author, having co-written “Doing Business in China For Dummies” more than a decade ago.
Prudential (PRU) £12bn annuity sale to Rothesay Life has been blocked at the 11th hour by the High Court in a ruling that could have significant implications for the pensions industry. Judges ruled that Prudential policyholders had not opted to have their insurance policies run by Rothesay Life. The portfolio transfer was first announced by Prudential in March 2018 as part of plans to demerge its UK & Europe business. The agreement was made in two parts. First, the transfer of assets and liabilities to Rothesay Life and then the transfer of legal ownership of the pension policies. The High Court blocked the second part of the transaction because policyholders “strenuously opposed” the deal on the grounds that they had selected Prudential as their provider based upon “its long history as a leading UK insurance company.” Policyholders said Prudential’s assurance business had committed to make payments to them for the remainder of their lives, and that they trusted them “to honour that commitment”.
Ryanair Holdings (RYA) has been granted permission by the Irish High Court to seek an injunction to prevent a planned two-day strike next week by its pilots based in the country. The budget airline is attempting to block 180 pilots it directly employs at its Dublin base from striking next Thursday and Friday after talks with unions broke down. The proposed industrial action would coincide with a strike by the carrier’s UK-based pilots, which threatens to disrupt passengers’ travel plans ahead of the bank holiday, traditionally the busiest weekend of the year for British airports. UK-based pilots are also planning a further three-day stoppage from September 2 after Ryanair failed in its attempts in July to convince a British court to block the walkout. The carrier is facing a wave of industrial action across Europe as staff in Portugal and Spain plot industrial action that could inflict chaos on the travel plans of sun-seeking holiday makers.
Prudential (PRU) has said that it will push ahead with its planned demerger, despite a shock legal judgment preventing it from offloading £12 billion of annuities — a deal that had been seen as smoothing the way for the split. The High Court surprised the insurance industry yesterday by blocking the transfer of 400,000 Pru policyholders to Rothesay Life, a specialist bulk annuity business, after some of them objected. The deal, the biggest of its kind, was announced in March last year on the same day that Prudential revealed plans to demerge M&G Prudential, its UK pensions and global asset management division. The veto means that the book of annuities will stay within the M&G Prudential business, pending a probable appeal by Prudential and Rothesay. Financial responsibility for the pensions has already passed to Rothesay under a reinsurnace deal, but the block means that Pru will continue to have to handle the administration.
Former CIA officials hired by Muddy Waters to weigh up the credibility of statements by executives in Burford Capital (BUR) have accused them of evasion and aggression. In a highly unusual step, Muddy Waters revealed that it had brought in an American consulting firm that claims to specialise in identifying deceptive behaviour through textual and verbal analysis. QVerity, which is based in Greenville, North Carolina, said that written and verbal responses from Burford since the short-selling attack had been launched last week contained “a significant volume and density of deceptive behaviour across all the issues identified [by Muddy Waters]”. Burford declined to respond to the QVerity report, but allies of the beleaguered company disparaged the findings as “drivel, nonsense and devoid of factual analysis”.
SSP Group (SSPG) has backed its chairman after a shareholder rebellion this year. More than a third of shareholders who voted at SSP’s annual meeting in February opposed the re-election of Vagn Sorensen, the chairman, over concerns that he was “overboarded” — the term for holding too many directorships — and about the length of his tenure, which goes beyond corporate governance best practice. Blackrock, Legal & General and Vanguard, fund managers that are all top-ten shareholders in SSP, have taken a tougher line this year on directors they believe are spreading themselves too thinly. Blackrock has said that companies should provide a clear explanation when chairmen serve on more than two other boards. Vanguard has said that it will vote against directors serving on more than four boards.
Ted Baker (TED) has called time on its children’s clothing tie-up with the embattled department store chain Debenhams (DEB) and agreed a partnership with its rival Next (NXT) instead. Ted Baker has signed a five-year-deal that means Next will create and sell the label’s children’s clothing, shoes and accessories. The products, which will be developed in collaboration with Ted Baker’s own creative team, will be sold in Next’s shops and online, as well as Ted Baker’s website. Ted Baker said that its childrenswear partnership with Debenhams will end in February, although it will continue its “mutually profitable relationship” with the department store in lingerie and nightwear.
Ultra Electronics Holdings (ULE) has won a billion-dollar contract to supply the US navy with sonobuoys. Ultra Electronics said yesterday that with Sparton, its American joint venture partner, it had been awarded a contract with a cap of $1.04 billion for a yet to be defined number of the marine listening devices. The joint venture named Erapsco (Expendable Reliable Acoustic Path Sonobuoy Company) already supplies the US navy. Production will take place at Ultra’s factory in Indiana and at a facility in Florida owned by Sparton, which Ultra tried to buy a few years ago before US regulators blocked the deal.
A sharp drop in the value of its assets and a stock market fine for the “unacceptable conduct” of its former directors have helped to push Real Good Food (RGD) to a heavier annual loss. The company has completed a restructuring to tackle its debt. After selling a string of brands, it has been left with two divisions: the Renshaw cake icing brand and its Brighter Foods division, which makes healthy snack bars for supermarkets. Real Good Food reported a pre-tax loss of £26.1 million for the year to the end of March, compared with one of £9.1 million last year. The company wrote down the value of its assets by £18.7 million. It also had to pay a £300,000 fine after it was censured by the London Stock Exchange in the wake of an investigation which discovered that the business had misled investors in 2017 about its performance, leading to a profit warning. The £6.5 million company this week extended the repayment of its £35 million of debt with its three leading shareholders.
Sport proved to be almost as attractive with investors as bikini-clad girls and buffed-up boys after ITV (ITV) turned heads with its plans for La Liga and the Rugby World Cup. The broadcaster said that it would extend coverage of Spain’s top football league and that it had signed an exclusive deal with Ocean Outdoor to broadcast highlights from next month’s oval-ball tournament on giant screens in six British cities, including London.
Premier Foods (PFD) climbed after Sky News reported that Colin Day, 63, former chief financial officer of Reckitt Benckiser, was among the leading contenders to become its chairman, replacing Keith Hamill, 66, who is to step down after less than two years. Mr Hamill’s departure comes after the resignation in January of Gavin Darby, 62, chief executive, who had been criticised by activist investors.
Marshalls (MSLH) rose after a recommendation by Numis. Analysts said that the pacing supplier’s growth in the half-year to June had been driven by its alignment to the better-performing parts of the construction sector — housing, infrastructure and water management. Marshalls supplies stone and concrete to developments ranging from driveways to Trafalgar Square. In its interim results on Thursday, it said that plans to pedestrianise town centres had helped to lift pre-tax profits from £32.5 million to £37.1 million in the six-month period.
Sports Direct International (SPD) may have lost its auditor this week, but the shares rose 9p after Richard Bottomley, 62, a senior non-executive director, bought 10,000 shares at 10p each on Wednesday. The company also said yesterday that it was shutting eight Jack Wills shops, only two weeks after buying the preppy fashion brand in a pre-pack administration.
Standard Life Aberdeen (SLA) added 3¾p to 241¾p after it said that it had instructed Citigroup Global Markets to initiate a share buyback in which it will return up to £200 million to shareholders.
Acacia Mining (ACA) climbed 1½p, or 0.6 per cent, to 249½p, despite saying that production at its North Mara mine in Tanzania would not resume until a government-issued prohibition notice was lifted.
Hiscox Limited (DI) (HSX) gained 22p after Morgan Stanley raised its price target for the insurer from £16.98 to £17.80.
Oil and gas explorer Andalas Energy and Power (ADL) rose 18.5% to nearly a fifth of a penny after it said that its well in Sumatra was performing ahead of expectations.
Maestrano Group (MNO) said that it had adequate cash reserves to support its future plans and that it was in talks about dealmaking opportunities. The shares leapt by 35.7% to almost 2p.
Burford Capital (BUR) is replacing its chairman and finance chief in an effort to appease shareholders after a US hedge fund made allegations of poor governance and murky accounting practices. Burford has faced criticism over the fact that its chief financial officer, Elizabeth O’Connell, is married to the chief executive, Christopher Bogart. Muddy Waters, a San Francisco-based hedge fund, said the pair’s relationship posed a conflict of interest and should alarm investors. Burford said on Thursday: “Concern has been raised about the fact that Burford’s CEO and chief financial officer are married. We believe that concern is unjustified given Burford’s control structure and ignores Burford’s finance and accounting structure. Nevertheless it is clear that investors would prefer an alternative CFO.” O’Connell, appointed in 2017, has been replaced by Jim Kilman, a former Morgan Stanley investment banker. O’Connell will now serve in the lower-tier role of chief strategy officer. But Burford’s efforts failed to pacify Carson Block, the founder of Muddy Waters, who said the new finance chief was still too cosy with Burford’s leadership given the firm had been his client at Morgan Stanley.
Shares in Aston Martin Holdings (AML) tumbled to a new low as pressure continued to mount on the British luxury carmaker amid a broader market rout. The carmaker last month downgraded its sales forecasts for 2019 from about 7,250 vehicles to 6,400, citing macroeconomic uncertainty in the UK and Europe, which face slowing growth and the threat of a no-deal Brexit at the end of October. Aston Martin’s weaker sales in the first half of the year – at a time when it needs to fund a new factory to build a make-or-break SUV, the DBX – have led many investors to question whether it will need to raise more money, potentially diluting the value of shares. The worsening outlook has added to financial pressures. Moody’s ratings agency downgraded its rating on Aston Martin’s debt in July, making it more expensive for the carmaker to borrow money. Hedge funds have also taken out a record level of short bets that its debt will fall in value