Nosy parkers on prowl at AIM
This warning has been issued by Theodore Goddard, renown- ed as the solicitors who handled the abdication of Edward VIII in 1936 but now a leading corporate law firm.
John Clark, Theodore's head of corporate finance, said: "People have underestimated the amount of due diligence advisers may have to do if they want to be satisfied that they are not putting themselves at risk."
Details of all unspent convictions - broadly, those incurred in the last three years for minor offences - are one of four categories of personal information that directors of AIM companies must publish, but which do not apply to directors of companies floating on the full stock market.
The other items are all bankruptcies, receiverships or liquidations, all public criticisms levelled at them by statutory or regulatory authorities, and all directorships held within the previous five years. As the rules do not specify that these events must be in the UK, advisers will have to spend considerable time and money trawling through records in every other country.
To highlight the problem, Theodore produced a dummy AIM prospectus for an imaginary brewery, Spoofbrew, boasting such brands as Rocket Fuel, Wimps Stuff and Blimey ECK.
Spoofbrew's chairman, Lord Wobbly, is shown as having paid a pounds 5,000 fine for obstructing police and pounds 100 for a parking offence. Brian Damage, the chief executive, has three convictions for drunk and disorderly, while the operations director, Asa Skunk, was fined pounds 50 for indecent exposure and spent three months in prison for defacing government property.
Mr Clark said: "This spoof prospectus . . . highlights some areas which may prove troublesome to companies considering an AIM quotation."
Patricia Knox, the Stock Exchange's press officer, said: "We have done this deliberately so that investors have as much information as possible because, unlike full listings, we will not be vetting the documents. We do demand this information for full listings, but it does not have to go in the prospectus."
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