“The new board of Plus Markets is investigating a series of what it calls ‘significant’ payments made to advisers, executives and employees relating to the sale of the group’s stock exchange business to interdealer-broker Icap earlier this year.
The disposal was part of a wider plan to wind up the company’s operations, given the codename ‘Project Chardonnay’. In a regulatory filing lodged with the London Stock Exchange, the firm’s new directors, Hamish Harris and Donald Strang, warned they would seek to claw back payments ‘where possible’.
The directors said in the filing. ‘It would appear that the previous management underestimated the costs of the formal sale process, which ended up being far greater than anticipated.’
The payments included settlement costs to the bourse’s then-chief executive, Cyril Theret, and Nemone Wynn-Evans, its then-chief financial officer, of £481,500 – 40% of the group’s available cash reserves at that time, the directors said. Other payments included more than £680,000 of legal fees, and £40,000 of public relations costs.
Theret, Wynn-Evans, and their previous spokesperson, did not respond to requests for comment. Icap declined to comment.
In February, the bourse, which had made sustained losses for the past five years, announced that it was putting itself up for sale. When a buyer for the whole group failed to emerge, the bourse announced in May that it would be forced to shut down operations and sell off its assets individually.
The announcement prompted an outbreak of fury from shareholders, who claimed they had not been informed that the company would be forced to shutter operations and liquidate its assets if the sale process was unsuccessful.
Icap initially offered to acquire the loss-making Plus-SX part of the business for the nominal sum of £1, and later upped its bid to £500,000, which was completed in June. No explanation for the disposal projects name is given in the filings.
‘Project Chardonnay?’ said one shareholder, ‘What on earth were they drinking?’”
Here ate SBM, we wholeheartedly approve this investigation and look forward to reporting the results. It is heartening to see one company’s set of shareholders standing upto the seeming “sewn up” cosy nature of the City. This one looks to run for a while yet.