2014

Today’s announcement that takeovers by schemes of arrangement are to be subject to tax is a victory (albeit a small one) for private investors. See page 61, paragraph 1.249, of the full Autumn Statement for which a link appears below. The UK Shareholders’ Association (UKSA) welcomes the news, because we believe it will result in fewer takeovers by this method.

Two members of the UK Shareholders’ Association were pleased to have the opportunity of speaking at the London Investor Show, 24th October 2014. Malcolm Howard tackled “How to read published accounts to spot undervalued companies” and Eric Chalker answered the question, “Do you really own your shares?” A good number of new members joined at the UKSA stand, where many interesting conversations too place. The organisers’ video of the event can be found here: http://youtu.be/BpxVfltW82g

For the past 3 years, The UK Shareholders’ Association has played a leading role in advising the Government, the Financial Reporting Council, the Financial Conduct Authority and other bodies on issues arising from the growth of pooled nominee accounts, in which close to a majority of private investors now find themselves.

The UK Shareholders’ Association continues to fight for better corporate governance and the better accounting that goes with it. One matter of concern has been, what should be meant by the term “going concern”?
For many years company directors have been required to ensure and believe that their accounts are drawn up on a “going concern “basis. In practice this has always been the case, as to use any other basis could only mean that the liquidator was at the door.

Stockbroker Selftrade recently threatened to deny its customers access to their investments. It has since told them they are to be transferred to Equiniti, but not yet.

Selftrade originally demanded highly personal, intrusive information, supported by certified documents sent through the ordinary post – or accounts would be frozen. In the face of customer outrage the demands have been watered down, but they are still demands.

Following a questioning letter to Sir David Walker about bonus awards for 2013, UKSA was invited to meet him. This meeting took place on Monday 7th April.

The economic value of the Persimmon 2012 LTIP grant is now close to £400million.
• £120million of this will go to just 3 directors.
• £10million will go to the Chief Executive who retired in April 2013.

This is a huge transfer of value from a scheme that was never justified in the first place (see UKSA's 2013 advice) and has since been inflated by the effect on all housebuilders' share prices of Help to Buy.

Long term Barclays’ shareholders who took up the Open Offer of 2008 will remember bitterly the board’s broken promises, explicitly stated in the Q & A leaflet issued at the time, that not only would it “maintain its current dividend policy” but the new shares would qualify for the next dividend to be paid. Ever since then it has been evident that the bank’s shareholders, its nominal owners, count for very little indeed by comparison with the hunger of its executives for their bonuses.

As the UK’s principal organisation representing the interests of individual shareholders, we play an active role in seeking to influence government and the various regulatory bodies on matters which affect those interests. It is a feature of the strength of our membership that we are able to draw upon considerable experience, professional as well as investment, to ‘punch above our weight’.

It has been announced that Sir Win Bischoff, currently chairman of Lloyds Banking Group plc, will succeed Baroness Hogg as chairman of the Financial Reporting Council (FRC).
Notably, as a long term banker, Sir Win is known to be in favour of improved accounting, particularly for the banks. At the launch of a book on the banking industry in 2013 he commented, “We need a return to proper forward loss provisioning. People should be paid on realised profits, not mark-to market (values)”.