The solicitor who set up the law firm MJ Hudson (MJH) and then took it public has announced his intention to resign as group chief executive.
Often ignored as one of the listed law firms, Matthew Hudson launched the business in 2010 as a niche City private equity and corporate law firm, became an alternative business structure in 2014.
From making up 65% of MJH’s turnover in 2019, legal services now represent 27%.
A stock market announcement on Friday said: “[Mr Hudson] remains a significant investor and shareholder. However, with the events of the last few months, Matthew has informed the company of his intention to resign.
“Matthew will remain as a director of MJ Hudson Holdco Limited and MJ Hudson Limited for the interim.”
In raising £9.2m last September, Mr Hudson’s shareholding was diluted to just under 25%. He remains the largest shareholder.
In December, however, MJH’s shares were suspended after the company announced “significant” issues with the 2022 accounts that meant the results would be below previous guidance. Its chief finance officer was also suspended.
The shares had fallen 68% during 2022, to 13.13p, when they were suspended.
A trading update last month said the company was continuing work “to achieve the necessary clarity on its full-year 2022 financials”.
Further, it had received interest in some of its divisions and had engaged advisers Alvarez & Marsal “to look at a potential sale of one or a number of its business lines”.
The announcement went on: “In addition to demonstrating the value within MJ Hudson’s operating businesses, the board believes that such transactions would provide the best opportunity to strengthen the group’s balance sheet by reducing its debt and to ensure that it has adequate working capital in the medium term.”
A slowing of fund-raising activity and general transaction work for MJH’s clients towards the end of 2022 had hit the business, and it was now looking “to reduce costs as well as measures to strengthen the balance sheet and improve the free cash position”.
MJH has 345 staff in eight offices in the UK, Europe and US, serving more than 1,000 clients globally, including 18 of the FTSE 100.
Meanwhile, shares in the Ince Group remain suspended too as it still has yet to publish its results for the year to 31 March 2022 and first-half 2023 results.
An announcement just before Christmas said Ince’s new auditors, BDO, needed more time because of “the complexity of historic and legacy accounting issues”.
“In addition, ongoing delays in China as a result of Covid-19 restrictions continue to impact the audit process… The board is not aware of any material issues arising from the audit.”
The hope had been to publish the results by the end of January but this did not happen. The most recent announcement indicated that BDO expected to complete its audit of the FY22 results this month.
In other listed legal business news, insolvency litigation funder Manolete Partners has recruited Lord Theodore Agnew as an expert counter fraud adviser.
In January 2022, Lord Agnew resigned as the minister responsible for counter-fraud in protest at the government’s decision to write off £4.3bn in fraudulent Covid loans. He will be supporting Manolete on its work in this area.
Last November, Manolete revealed that it had begun working with Barclays Bank on a pilot to recover 102 potentially misappropriated loans under the government’s Covid Bounce Back Loan scheme.
“The initial recoveries on the pilot are very encouraging and we are hopeful that this will lead to wider adoption of our solution across the UK banking sector,” it said. “We are in active but early discussions with the leading BBL providers.”
Lord Agnew said: “Working in conjunction with government agencies and leading financial institutions, Manolete has developed an effective solution to assist in maximising the recovery of Bounce Back Loans that were unlawfully misappropriated by some UK company directors. I look forward to assisting the company in its recovery programme.”
Finally, fellow listed funder Litigation Capital Management toay announced a £6.3m gross profit from its funding of a claim against KPMG by the liquidators of Carillion. The claim, which settled confidentially last week, concerned the conduct of its audits of Carillion’s financial statements between 2014 and 2016.