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
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Sport
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
News
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
News
people
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Sport
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooks
ebooksA special investigation by Andy McSmith
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: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower