Daily Mail & General Trust's chairman, Viscount Rothermere, and Barclays' high-street bank chief, Frits Seegers, have pledged shares in companies they help to run as guarantees for bank loans, according to filings ahead of today's deadline to reveal such deals.
The chairman of the company that owns the Daily Mail newspaper has used a total of 12 million shares – 13 per cent of his shareholding – as collateral for different loans. Rothermere Continuation Ltd, of which Lord Rothermere is beneficiary, used 8 million ordinary shares currently worth £30m as security against a loan in December 2006. Lord Rothermere retains the right to use the stock's voting power. He also used 3.9 million A-class non-voting shares, worth £10m at last night prices, to guarantee various debts between 2003 and 2008. An additional 200,000 such shares have been pledged as support for another loan.
Mr Seegers has pledged almost 900,000 Barclays shares to secure a loan from Citigroup. When Mr Seegers, chief executive of global retail and commercial banking at Barclays, pledged the stock on 1 August, the shares were worth almost £6.5m. He used the loan to buy 140,000 shares in Barclays the following day at £6.80 a share. Barclays stock has since dived, to 59.2p yesterday, or less than 10 per cent of its value at that time.
DMGT and Barclays made the announcements amid a slew of revelations on such deals ahead of today's deadline to disclose them imposed by the Financial Services Authority. Companies had been haphazard about revealing such share pledges by directors against borrowings, because of lack of clarity about the disclosure rules. But last month David Ross, co-founder of Carphone Warehouse, left his post as deputy chairman of the company after admitting he used his holding in the business to guarantee personal loans on commercial property without telling colleagues. When the confusion about the rules emerged, the FSA decreed an amnesty on such undeclared loans.
Yesterday's announcements also included a disclosure that Marcus Wallenberg, a member of Sweden's wealthiest family, has pledged shares in the drug maker AstraZeneca as loan collateral; Robert Adair, chairman of Melrose Resources, pledged almost a quarter of the company's shares, as well as some stock of Leed Petroleum, another company he chairs, as security for insurance underwriting at Lloyd's; and the plumbing company Homeserve said that boss Richard Harpin has pledged almost 10 per cent of the company – a stake currently worth more than £61m – as security for personal borrowings.Reuse content