Quindell, the London stock-market listed group targeted for months by a short-selling research group Gotham City, was yesterday forced to part company with its chairman in an effort to restore investor confidence.
The decision that Rob Terry should leave came hours after it was announced that broker Canaccord Genuity had quit on 21 October, ahead of controversial share dealings by Terry and other directors.
Canaccord declined to comment on its actions, and shares in Quindell slumped 24 per cent yesterday to 55.50p, the lowest they have been since the end of 2011.
Terry’s tenure as chairman of Quindell, an insurance claims processor, has been blighted by attacks from Gotham City, which has queried the group’s business model and claimed its shares have been overvalued.
Earlier this year US-based shortseller Gotham City Research published a 74-page dossier on Quindell that wiped more than £900m off the company’s market cap in a single day. Terry described Gotham City’s statements as “provocative and misleading”. The High Court later ruled in Quindell’s favour in a libel case against Gotham after the US firm failed to provide a defence. But Quindell’s share price never recovered.
Terry is not the only executive heading for the exit. Laurence Moorse, the finance director, is to leave the board after next year’s annual meeting, but will remain for a further 12 months, according to Sky News. Steve Scott, a non-executive director who has served on Quindell’s board for more than five years, will also step down.
It is thought that David Currie, a former banker at Investec, will replace Terry on a temporary basis, pending the appointment of a permanent successor.
A Quindell spokesperson declined to comment when contacted by City A.M.
A broker leaving its employing company is a relatively rare occurrence. Andrew Parson, managing director of Adviser Rankings, told City A.M.: “Usually, it’ll be that the broker’s not happy with the liquidity of the company, or perhaps the company has breached certain covenants, or it might even be de-listing.”
Quindell’s shares closed at 55.50p, giving it a market value of £300m, compared with a peak of around £2.5bn.