Panel lays down law to PR firms

DAVID HELLIER

The chairman of the City's Takeover Panel, Sir David Calcutt, has issued a stern warning to the financial public relations industry about the improper leaking of price-sensitive information before and during takeover bids, it emerged last night.

The contents of Sir David's letter - which have been leaked to the Independent - caution senior figures in the industry and come in the wake of a stinging public rebuke by the panel of Financial Dynamics, one of the industry's leading firms. The panel, the self-regulatory body that sets the rules for takeovers, rebuked Financial Dynamics during the recent failed bid by Kvaerner for Amec, for the improper leaking of a profits forecast to an industry analyst.

Although Amec retained its independence, the panel's criticism pushed it to sack Financial Dynamics and appoint a rival firm in its place.

In his letter, Sir David says that at the panel's last meeting the view was expressed that there was an increasing level of concern about the number of unauthorised leaks. He warned that the panel's executive would deal "very firmly" with any further breaches of the panel's code, which insists that all information of a price-sensitive or material nature is released in an orderly way to all shareholders at the same time.

The letter comes at a time when Financial Dynamics is also being investigated by the Department of Trade and Industry over the alleged leaking of price- sensitive information ahead of financial results from Caradon, the building products group, last September.

The Department of Trade and Industry has taken the case on from the London Stock Exchange's surveillance team, which recently completed a report into the affair.

The exchange has listened to tape recordings of conversations between an employee of Financial Dynamics and an analyst from Robert Fleming, the investment bank, ahead of the public announcement of a profits warning from Caradon.

Three employees have left Robert Fleming as a consequence of the bank's own internal investigation into the affair. However, Financial Dynamics has maintained that the allegation that its chiarman, Tony Knox, provided analysts with inside information about the financial results of Caradon is "quite untrue".

The Takeover Panel has strict rules about the release of information and hopes that the financial public relations industry will adopt these rules voluntarily.

However, there are a growing number of people within the City, including Anthony Cardew of Cardew and Company, who believe that the public relations industry will be better off being properly regulated. Mr Cardew has said that he believes individuals and public relations companies should be awarded licences which can be withdrawn for breaches of conduct.

He is believed to be supported in this view by Simon Lewis of NatWest, who is the City's spokesperson for the financial public relations industry.

During the course of the recent pounds 3.8bn bid by Granada for Forte, the Takeover Panel was concerned by the level of confidential detail that appeared in newspapers. The director-general, Bill Staple, rang an Independent journalist pressing for the source of information on Granada's proposed cost savings if it won the bid. The Independent declined to co-operate, claiming the right to protect its sources.

The panel is believed to be getting increasingly concerned by stories which quote "sources close to the company," believing that in the main these involve quotes or information given to newspapers by public relations consultants.

Start your day with The Independent, sign up for daily news emails
News
Lois Pryce... Life Without a Postcode. Lois lives on a boat with her husband.. Registering to vote in the election has prooved to be very difficult without a fixed residential post code. (David Sandison)
newsHow living on a houseboat meant I didn't officially 'exist'
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Sport
Steven Fletcher scores the second goal for Scotland
cricketBut they have to bounce back to beat Gibraltar in Euro 2016 qualifier
News
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing