Crisis-ridden Quindell saw another £56m wiped off its value yesterday, after its founder, Rob Terry, cashed in almost £10m worth of shares.
Mr Terry, who was ousted from the company’s board last month, has reduced his holding from 8 per cent to 2.99 per cent just days after Quindell announced it had called in PwC to look over its books, following a torrid year.
At Tuesday’s 45.5p closing price, the stake sold by Mr Terry could be worth £9.98m. The news sent the group’s shares tumbling 12.75p - 28 per cent - to a new low of 32.75p; they have lost 88 per cent of their value this year.
Despite the fall, Quindell’s chief executive, Robert Fielding, played down the significance of the sell-off: “Sales of shares by Robert Terry have no impact on the day-to-day operations … The group’s business remains robust and we continue to work hard to deliver excellent service to our customers,” hesaid.
Quindell’s problems began to mount in April when £1bn was wiped off its value by an aggressive note from US short-seller Gotham City Research. Quindell won a legal victory against Gotham after it failed to provide a defence in court.
Since then Quindell has failed to gain a main market listing; was faced with the collapse of a joint venture with the RAC; and parted company with joint broker Canaccord Genuity.
However, its year culminated in the departure of founder and former chairman Mr Terry, as well as former finance director Laurence Moorse. Both were forced to leave last month after taking part in a controversial share-dealing arrangement with US finance provider Equities First Holdings that also sent the share price tumbling. Mr Terry is believed to have netted £6m from that.
Earlier this week, Quindell called in PwC to help restore its battered reputation. Interim chairman David Currie said the review was the “natural next step” to help prop up confidence in the business. The board said cash generation remains “a key focus” and measures are being taken to improve “the working capital profile of the group”.
Mr Terry’s share sale overshadowed a separate announcement from the company, which provides services to insurers.
Quindell said it had renewed a contract with insurance broker Swinton to handle claims for more than 1.2 million motor policy holders. It has also signed a new contract to provide technological support to Insurethebox.
“We are delighted to announce these new contracts and renewals which demonstrate that our service and technology offerings continue to be attractive to leading organisations in the insurance sector,” Mr Fielding added.Reuse content