Private eyes win on new market

PRIVATE EYES and credit information agencies are unlikely beneficiaries of AIM, the new Alternative Investment Market, set up to sponsor small and emerging companies. Their involvement stems from the due diligence needed to obtain a listing on AIM.

Credit agencies are being used to investigate directors' personal finances, to ensure they have not been involved in bankruptcies, or do not have outstanding County Court Judgments against them. For example, Dun & Bradstreet, the US credit rating agency, can supply details of a director's previous company history, including any receiverships or liquidations. It will also attest to a company's standing with its creditors, and if it pays its bills on time.

Companies used to obtain personal credit ratings on individual company directors include CCN, based in Nottingham, and Equifax Europe, a subsidiary of the $1.5bn sales US giant, Equifax Inc.

Richard McCrowham, the UK managing director, says the company carries out verification work - as it is known in financial circles - for several stockbrokers and financial institutions.

Private eyes are also being used, although nominated advisers are coy on naming them. Jeff Katz, director of operations at Kroll Associates, the US private investigations agency and one of the largest players in the UK, said he is unaware of doing this work specifically for AIM flotations.

This might be down to cost, as Kroll usually works on large deals, requiring complex due diligence.

The advent of the private eye is linked to one of the complaints companies have made about AIM. The Stock Exchange has been investigating charges that the market has failed in its original purpose of providing a low- cost route to a share quotation, and a cheaper way to raise capital than a full Stock Exchange listing.

Excessive due diligence is one of the problems cited. One source mooting an AIM flotation said: "Fees are being pitched at outrageous levels. Some companies are being asked to pay pounds 100,000, when all they want to raise is a few million."

Fee levels paid by companies that have come to AIM vary substantially depending on whether its advisers have high City profiles. DBS Management, a financial planning company based in Huddersfield, paid pounds 250,000 for the privilege of transferring from the Rule 4.2 market for smaller companies.

Kenneth Davy, the chairman, said the company had examined the options and decided it was in shareholders' best interests to go for the Rolls- Royce model. "We received lots of speculative proposals for cut price packages, but we deliberately chose not to do it on the cheap because it would be better for shareholders in the longer term."

Preston North End, the third division football club that anounced last week it was moving to AIM, took a less expensive route. Its attempt to raise pounds 4m from a share offer in September is expected to cost it less than pounds 80,000. Some firms are offering packages as low as pounds 50,000.

Greig Middleton, the combined adviser and stockbroker to the club, already has experience of the ins and outs of football clubs. It arranged Celtic Football and Athletic's share issue earlier this year, which defied expectations to raise over pounds 10m in a subscription for the 4.2 market. Celtic also intends to transfer to AIM, with the demise of the 4.2 on 29 September.

Start your day with The Independent, sign up for daily news emails
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

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

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police