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News - 19 August 2011

FSA fines prominent retailer for breach of rules.

The Financial Services Authority (FSA) has today fined Sir Ken Morrison £210,000 for breaching the Disclosure and Transparency Rules (DTR) by failing to disclose his reduced shareholding and voting rights in Wm Morrison Supermarkets Plc (Wm Morrison).

After his retirement as Chairman of Wm Morrison in March 2008 Sir Ken had a notifiable holding of voting rights of 6.38%. But between 2009 and 2010 Sir Ken had substantially cut his shareholding reducing his voting rights of over 6% (a holding worth over £450m) to 0.9%. Sir Ken failed to notify Wm Morrison on four separate occasions when his voting rights fell below 6%, 5%, 4% and 3% which he should have done.

His failure to notify Wm Morrison of the changes to his shareholding resulted in Wm Morrison not being in a position to update the market in accordance with the DTR rules. This resulted in the market being misled as to the ownership of voting rights in WM Morrison and Sir Ken's shareholding being stated incorrectly in Wm Morrison’s annual report of 31 January 2010.

Tracey McDermott, acting director of enforcement and financial crime, said:
“It is important that significant shareholders recognise that timely and accurate disclosure of their shareholdings and voting rights is a fundamental component of a properly informed securities market. Investors are entitled to know when major and influential shareholders significantly reduce their interest in a listed company.”

Tonmoy Kumar, Manager of the Accounts Department of ABDS says:

“The rules are designed to enhance transparency and provide investors with timely information regarding voting rights in issuers. But because Sir Ken co-operated with the FSA and agreed to settle at an early stage and therefore qualified for a 30% reduction in penalty. Were it not for this discount the FSA would have imposed a financial penalty of £300,000.”

If you need any help and advice on Financial Planning and Reporting, don’t hesitate, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar now to discuss how ABDS can help in all your Business planning.
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds.marketing@netaccountants.net

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