Panel lays down law to PR firms
Tuesday 06 February 1996
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.
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...