Quindell eyed in parliament as Lord Myners questions company’s activities
Former City minister Lord Myners has asked the government whether it will investigate embattled insurance outsourcer Quindell, its board of directors or its financial advisers.
The written parliamentary question, first reported by the Financial Times, was put to the government on 1 December. Myners said:
To ask Her Majesty's government whether they are investigating Quindell and its board of directors and financial advisers; and if not, whether they plan to do so.
Quindell's share price has tanked since April following the publication of a controversial paper from mysterious US short seller Gotham City Research. The researcher, named after caped crusader Batman's home town, published a 74-page dossier accusing Quindell of having "magical … paper profits".
The query was answered by Baroness Neville-Rolfe, who is a parliamentary under-secretary of state for the department for Business, Innovation and Skills.
The Baroness reiterated that the remit for potential investigations relating to possible market abuse sits with the Financial Conduct Authority (FCA). She said:
Quindell is Alternative Investment Market (Aim)-listed, which is controlled by London Stock Exchange and any enquiry relating to possible market abuse sits within the remit of the Financial Conduct Authority.
The government's Insolvency Service has discretionary powers under the Companies Act to conduct enquiries on behalf of the secretary of state where it appears that there has been misconduct in relation to the affairs of any company, including those not subject to formal insolvency.
For the investigation process to be effective, it is essential to maintain confidentiality at all stages and there is also a need to protect the commercial interest of companies against the danger of damage from malicious complaints. For these reasons, there are legal restrictions on disclosing information obtained during an enquiry and the service does not confirm or deny whether an investigation of a particular company is taking place.
Where other regulators and investigating agencies are involved, the Insolvency Service would liaise closely to ensure public money is not wasted duplicating resources.
In recent months Quindell's share price has yo-yoed amid a slew of surprise announcements.
Earlier this week, former chairman Rob Terry sold off most of his remaining stake sending shares plummeting by almost half their value, to 24.1p.
The stock was also rocked after it emerged audit giant PWC would carry out an independent review into Quindell's accounting practices.
This followed Terry and non-executive director Steve Scott stepping down last month, shortly after it was revealed that the company's broker Canaccord Genuity had resigned in October. Fidelity, one of the world's largest investors, has also halved its stake in Quindell.