There’s not much comic about Quindell’s recent behaviour


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The Independent Online

Holey Corporate Governance! is how one law firm describes professional services outfit Quindell, in a nod to the classic 1960s Batman TV-show.

It’s not wrong. For those who think the subject of governance is of interest only to box-tickers and pointy-heads, Quindell provides the perfect riposte.

The AIM-listed trainwreck is desperately trying to “move forward” and draw a line under its sorry recent history. Whether it will be able to do that is open to question.

The story so far is that having grown like wildfire and gone on a spending spree, the company hit a brick wall when US short-seller Gotham City Research launched an attack worthy of DC Comics’ Dark Knight, calling out Quindell’s business model in the process. It hit home harder than one of Batman’s haymakers and the shares fell into the East River. Kapow!

The good news for investors is that the company has managed to find a deal to sell what had been its most important business. An Aussie firm, Slater & Gordon, is putting up £637m for the claims handling operation, plus a cut of the fees from some 53,000 claims for noise-induced hearing loss that Quindell has on its books.

About 90 per cent of Quindell’s revenues come from that operation, and while the deal might not look all that exciting, it’s super-powered when you consider Gotham’s valuation of the business. It tweeted that it had expected Slater’s to pay “pennies on the $”. Another tweet said: “We are puzzled by Slater & Gordon’s proposed transaction. That said, stranger things have happened. Hewlett Packard acquired Autonomy.”

Well yes, and the latter transaction did not work out terribly well for HP, getting mired in claims and counter-claims about accounting. For the record PwC has said Quindell’s accounting was at the “aggressive” end of what would be considered acceptable.

There aren’t many people who’d use the term “acceptable” to describe the way the company communicated the dealings of its founder and chairman Rob Terry – was he buying shares, or selling shares, or selling to buy more? Whatever, he was forced out, heaping yet more pressure on the company. Which is now promising to hand the proceeds of the deal back to shareholders.

The board needs to hire some credible new non execs, and quickly. They’re going to have a busy few months. The legal claims are likely to be flying in quicker than the Batplane on a moonless night in Gotham.

Flying into trouble with airport expansion?

Trying to fly a plane into the election campaign is Let Britain Fly, which secured the backing of 50 MPs for its call for the next government to make a quick decision on airport expansion in the South-east of England. Now both major parties are trying to draw support by promising populist measures that critics say are economically damaging. So taking some meaningful action on an economic millstone – and that’s what the lack of air capacity represents – might be a good idea.

The range of its parliamentary supporters suggests that there might, at last, be grounds for some cautious optimism. They include Louise Ellman, the Labour chair of the Transport Select Committee in the last parliament, Graham Brady, who held the role of chair of the Tories’ backbench 1922 Committee and Stephen Gilbert, the Liberal Democrat who chaired the all-party parliamentary group on regional aviation.

Here’s the fun part: Let Britain Fly doesn’t specify where the new runway it’s calling for should be built. When I asked, just for fun, if any of them had constituencies on Heathrow’s flight path the commendably speedy response that came back named Mary McLeod, Seema Malhotra and Mark Field.

Now, I’d be more than happy to add my name to the motion. While I’m not blind to environmental concerns, the UK is cutting its nose off to spite its economic face by procrastinating. But I’d be willing to bet that those three don’t have Heathrow in mind when it comes to the quick decision they want. And Sir Howard Davies’ Airports Commission has Heathrow on two of the three options it is considering for its final recommendation – due after the election. There’s a reason for that: it might not be popular, but Heathrow is the most sensible option.

Unfortunately for Let Britain Fly, and for the economy, with weeks of horse-trading the likely outcome of an indecisive poll, a quick decision on such a controversial subject is highly unlikely.

Fed chairman Ben Bernanke

What a little bird never told Ben Bernanke...

Drum roll, please: Ben Bernanke is blogging. The man who ran the US Federal Reserve throughout the financial crisis says he was reluctant to take the plunge while on the job because of the danger of his words being misinterpreted. Now, however, “I can once more comment on economic and financial issues without my words being put under the microscope by Fed-watchers.”

It’s almost touching how naive clever people such as Mr Bernanke can be. While he no longer has the power to spark speculation about a rate rise by, say, fretting about deflation, that doesn’t mean that his words won’t be put under the microscope all the same.

Especially if people get the merest hint of a disagreement with his successor Janet Yellen, in whose “capable hands” he’s left the job of running the Fed.