I'm just going by the advice of my tax advisor. He advised me to sell a few days before the capital return, pay the CGT and then re-buy once the capital has been distributed. I will follow his advice as he probably knows more than I do.
Just what I was thinking. If you work back from and end Nov payout, given payment processing time, court application, AGM or EGM, resolutions, vote , strategy preparation etc, the latest date should be around mid sept for all to be revealed.
Usually brought against insurance related companies for failure to treat customers fairly as that is their primary concern with regard to insurancei. The weightier fines issued this year have been against Banks for breaches in duty to manage or control their staff, for example with regard to LIBOR infringements, etc - link for 2015 fines - http://www.fca.org.uk/firms/being-regulated/enforcement/fines
Personally, I don't expect a huge fine from the FCA for creative accounting misdemeanors by QPP, but who can tell?
it would not be prudent of the BoD to fail to take advice (presumably a combination of legal and accounting) on how to ensure the company could meet any requirements imposed on it from legal/regulatory actions involving it which the BoD has already been noticed about. it would be negligent not to make some provision, or at least to consider provision that might be needed.
two issues arise then affecting share price, one concerns the amount of fines etc, that might come the company's way, but the other is more about timing for resolution. it's possible for example that the eventual total amount of return may not be much reduced, but it might take some time (out of company's control, b/c SFO etc) for a final tranche of it to be released. as ever, markets tend to dislike uncertainty, so the current s/price discount presumably partly reflects a % that investors think might be lost to fines, but also just reflects a % discount simply to do with that uncertainty on time-scales and the 'unknown.' if i've understood correctly, another variable is probably uncertainty re the proportion of the capital return that would be made as a cash return, versus a possibility that some % of it would be used for share buyback (which the market would probably tend to price in a bit differently).
meanwhile, of course, the other big issue is how to value the remaining businesses. debate around the historic issues probably perhaps still hindering the attention needed to underlying value going forward.
In case you missed my post yesterday. The company cannot make a Capital Return without a High Court Order granting permission. These applications take time and half the judiciary are on holiday at the moment. I would be willing to wager that application is already lodge with the court or being drawn up by lawyers.
as a long term share holder i have to admit my concerns have come and gone at various times over the last 18 months....it is worth noting I shall continue being a shareholder.. However I have been thinking lately that with the impending return of capital, to which no new news on this has come out from the BOD, whether the delays are because of the FCA investigation.. I suspect the BOD knew an investigation would happen and are subsequently holding on to the capital to cover any possible fines etc?? .. thus reducing our value of return?? Hopefully I am wrong but the mind does play games….. GLA
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