[1]Gibson: six-month investigation
The barrister acting for shareholders suing RBS and Tesco has been appointed as lead counsel for the potential group action being brought against Quindell.
Your Legal Friend – the consumer brand of Liverpool firm Camps – has already registered more than 500 shareholders interested in joining the action [2], which will be led by Philip Marshall QC of Serle Court.
The news came in the wake of the Financial Conduct Authority’s (FCA) decision to begin an investigation into public statements made by AIM-listed Quindell in respect of its accounts during 2013 and 2014.
The firm said it considers this to be “a significant endorsement of its view that Quindell must now address a number of pressing questions regarding the financial information contained and reported in its public statements”.
It argued that the statements “suggest that, at the very least, significant mistakes were made in its published statements for that period”. It said these include:
- Published results and forecast statements which the new board of Quindell themselves have now indicated – following an independent review by PwC – were not produced on the basis of accounting policies that were “acceptable” in all respects and will therefore require to be materially restated;
- Published statements, valuations and forecasts related to acquired businesses “which we expect the 2014 results will now show require substantial corrections and write-offs”;
- The announcement of significant share purchases by directors on 5 November 2014 followed by a correcting announcement five days later which indicated that the substance of these transactions was in fact largely concerned with net director share sales. “These share sales were made in a period after one of the company’s joint brokers and financial advisors had submitted notice of its resignation but before that material fact had been announced to the market”;
- Confirmation in June 2014 of progress towards a main market listing, followed two days later by an announcement that this had been rejected.
Colin Gibson, chief operating officer of Your Legal Friend, said: “For the past six months, we have been investigating the circumstances of the potential claimants and the available public information. The latter has however been hampered by the significant delay in Quindell’s publication of its 2014 annual results.
“Following the expected announcement of these results over the coming weeks, we would expect to progress the investor action to the next stage.”