Wheeler 'revised' lock-in agreement to sell £5m IG shares for Tory gift

Stuart Wheeler, the spread betting boss who has pledged £5m to the Conservative Party, sold one million shares in his company to fund the donation.</p>In a statement, IG Group said yesterday that its chairman and chief executive had off-loaded the ordinary shares on Tuesday, at 516.5p. The move came despite an earlier lock-in agreement by Mr Wheeler, designed to prevent him from selling any of his stake until 19 July 2001.</p>Paul Austin, a spokesman for IG, confirmed that the terms of Mr Wheeler's lock-in arrangement had been "revised" to allow him to help fund the Tories' election campaign. Details of the original agreement were contained in the company's prospectus, published ahead of its flotation last July.</p>To proceed with the share sale, Mr Wheeler was obliged to seek a waiver from his broker, Investec Henderson Crosthwaite. As the company's major shareholder, he also had to win permission for the disposal from members of IG's board - Tim Howkins, finance director, and Torquil Norman, a non-executive director.</p>A spokesman for the Financial Services Authority said Mr Wheeler's action was not in breach of listing rules. He said: "We require the disclosure of lock-ins, but we don't require companies to have them, and we don't police them." He added that the statement from IG, detailing Mr Wheeler's share sale, "seemed to be pretty full and fair", saying: "I don't believe there will be any role for the listing authorities in this."</p>But the move sparked concern that the spirit of lock-in deals had been compromised. Justin Urquhart-Stewart, the corporate development director for Barclays Stockbrokers, said: "It's not very good business practice. The whole point of lock-ins is to provide investors with confidence that directors are interested in developing the business for the long-term, and not just flogging off shares quickly." He added: "People become even more cynical where politics is involved."</p>A spokesman for Investec defended his firm's decision to allow Mr Wheeler to renege on his previous agreement. He said: "We didn't believe [the share sale] would present any threat to the orderly market."</p>Christopher Whittington, IG's non-executive deputy chairman, said: "We [the board] didn't see any problem in selling one million shares out of over nineteen million. It wasn't an issue."</p>Mr Wheeler, who cashed in shares worth £5m ahead of IG's initial public offering, has now agreed to a new lock-in arrangement. He was previously entitled to sell six million shares after 19 July this year. That has now been reduced to two million, including the one million that have already been sold, until July 2002.</p>