Inquiry starts into OFT gaffe over Colorvision
Saturday 04 May 1996
"It's a bit of a balls-up to say the least," an OFT spokesman admitted. "Something went horribly wrong."
The OFT had meant to say Colorvision's appeal against revoked consumer credit licences would go uncontested if a proposed boardroom shake-up, including the appointment of the former Wembley Stadium boss Sir Brian Wolfson as executive chairman, was implemented.
Instead, the OFT sent out a January press release, stating Colorvision had been stripped of the licences and slammed the company's business practices, which included misleading prices, dishonestly supplying secondhand or ex-display goods and failing to offer refunds when consumers were entitled to them.
It took the OFT almost half an hour to rectify its mistake, by which time Colorvision's shares had slumped to an all-time low of 16p. They soared to 41p when the real OFT position became clear and ended the day up 6p at 32p.
As part of the restructuring, chairman Neville Michaelson and non-executive director Bernard Michaelson have retired. Sir Brian will be joined on the revamped board by Adrian Collins, former chief executive of fund manager Gartmore, and Anthony Rawlinson of venture capital group Strand Partners.
The Michaelsons have also transferred, for no payment, a 29.9 per cent stake in the company worth just under pounds 2m to Sir Brian, Mr Collins and Strand Partners.
A further 6.8 per cent stake will be placed in a discretionary trust for the benefit of the company's key employees, leaving Neville and Bernard Michaelson with 29.9 per cent of Colorvision's equity.
Colorvision said the changes were being carried out at its own suggestion. The final decision over its consumer credit licences rests with Ian Lang, the Trade and Industry Secretary.
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