RE: Compare and contrast11 Dec 2020 16:47
True! I wonder if it is because the market wonders whether we're controlled by Mike Ashley but actually the Fraser Group results stated the following re their stake in Studio Retail Group:
"Control And Significant Influence Over Certain Entities
Under IAS 28 Investments in Associates and Joint Ventures, if an entity holds 20% or more of the voting power of the investee, it is presumed that the entity has significant influence, unless it can clearly demonstrate that this is not the case. The Group holds greater than 20% of the voting rights of Studio Retail Group Plc and French Connection Group Plc, whereby management consider that the Group does not have significant influence over these entities for combinations of the following reasons:
• The Group does not have any representation on the board of directors of the investee other than a Frasers Group representative having an observer role on the board of Studio Retail Group Plc. Management have reviewed the terms of the observer arrangement and have concluded that this does not give them the right to participate in or influence the financial or operating decisions of Studio Retail Group Plc. Studio Retail Group Plc can terminate this arrangement at any time, and can determine which parts of the board meetings the representative can be present at and what information they are given access to;
• There is no participation in decision making and strategic processes, including participation in decisions about dividends or other distributions;
• There have been no material transactions between the entity and its investee companies;
• There has been no interchange of managerial personnel;
• No non-public essential technical management information is provided to the investee.
In assessing the level of control that management have over certain entities, management will consider the various aspects that allow management to influence decision making. This includes the level of share ownership, board membership, the level of investment and funding and the ability of the Group to influence operational and strategic decisions and effect its returns through the exercise of such influence."