Mortgage Advice Bureau Regulatory News (MAB1)

1 May 2020

Mortgage Advice Bureau (Holdings) plc ("MAB")

Posting of Report and Accounts for year ended 31 December 2019 and Notice of Annual General Meeting ("AGM")

MAB announces that it has today published its Report and Accounts for the year ended 31 December 2019 on its investor website (www.mortgageadvicebureau.com/investor-relations).

Copies of the Report and Accounts have been sent to shareholders incorporating the Notice of AGM. The AGM will be held at 2:00pm on Tuesday, 26 May 2020 at Capital House, Pride Place, Derby, DE24 8QR.

Further details on the AGM and the business to be conducted

Shareholders will note that in the light of the continuing Government restrictions prohibiting public gatherings of more than two people, this year's AGM will be a closed meeting and shareholders should not attend in person. Voting at the AGM will be conducted by way of a poll and shareholders are strongly encouraged to complete a form of proxy and appoint the Chair of the Meeting to vote on their behalf.

In addition to the more usual business at the AGM, the Notice of AGM contains an additional special resolution in connection with the making of past dividends of the Company where certain technical requirements of the Companies Act 2006 ("CA 2006") were not complied with. An explanation of the background to this matter is set out below.

Explanation of the special resolution in respect of prior dividends (the "Resolution") and related party transactions

The Board has become aware that the Company has not prepared and filed with Companies House interim accounts in connection with the making of past dividends between 2015 and 2019 ("Prior Dividends") in accordance with sections 836 and 838 of the CA 2006. Whilst the Company had sufficient distributable reserves at the times of the payments of such Prior Dividends, the CA 2006 requires that where the distributable reserves as shown by the prior audited accounts of the Company (and as not previously utilised for distributions) are insufficient to justify a dividend, a public company is required to prepare in the prescribed manner and file interim accounts.

Whilst this is purely an administrative oversight, the Company has been advised that, as a consequence of the Prior Dividends having been paid otherwise than in accordance with the CA 2006, the Prior Dividends are technically unlawful and that the Company may have claims against past and present shareholders who were recipients of the Prior Dividends and against persons who were directors of the Company at the time of the payment of the Prior Dividends. The total aggregate amount of the Prior Dividends is approximately £48.8 million.

As noted above, the Company had, at all relevant times, sufficient distributable reserves to enable such dividends to be made. The Board notes that the Company has no intention of bringing any such claims and that the Group's historic reported trading results and financial condition and ability to pay future dividends are entirely unaffected by this matter. In order to address the potential consequences of the Prior Dividends having been made otherwise than in accordance with the CA 2006 and to put all potentially affected parties so far as possible in the position in which they were always intended to be had the Prior Dividends been made in accordance with the requirements of the CA 2006, the Company is proposing a special resolution, the full text of which is set out as Resolution 16 in the Notice of AGM.

If passed, the effect of the Resolution will be to:

1. waive and release those shareholders who appeared on the register of members on the record date for any of the Prior Dividends from any and all claims which the Company has or may have in respect of the payment of any of the Prior Dividends, such waiver and release to be effected by way of the entry by the Company into a deed of release (the "Shareholders' Deed of Release"); and

2. waive and release any rights of the Company to make claims against the Directors (past and present) in respect of each of the Prior Dividends, such waiver and release to be effected by way of the entry by the Company into a deed of release (the "Directors' Deed of Release").

The approach that the Company is proposing by way of the Resolution is similar to the approach taken by certain other UK listed companies that have also made corporate distributions otherwise than in accordance with the CA 2006, having failed to comply with the procedural requirement to file interim accounts specifically prepared for the purposes of the payment of a dividend or other distributions.

The entry by the Company into the Shareholders' Deed of Release and consequential waiver of any rights of the Company to make claims against shareholders in respect of the Prior Dividends constitutes a related party transaction pursuant to Rule 13 of the AIM Rules, in respect of Peter Brodnicki, Liontrust Investment Partners and Kayne Anderson Rudnick Investment Management, being all shareholders who are currently each interested in more than 10 per cent of the total voting rights to be cast at the AGM.

In addition, the entry by the Company into the Directors' Deed of Release and consequential waiver of any rights of the Company to make claims against past and present Directors in respect of the Prior Dividends, constitutes a related party transaction pursuant to Rule 13 of the AIM Rules as each of the Directors is a related party for the purposes of the AIM Rules.

The votes of each of the Directors and their respective associates and those of former directors shall not be taken into account in establishing whether the majority necessary for the passing of the Resolution has been obtained. The Directors have undertaken to abstain, and to take all reasonable steps to ensure that their respective associates abstain, from voting on the Resolution.

In lieu of any independent Directors' recommendation in relation to the Resolution, in order to provide a statement as to what is fair and reasonable, and specifically due to all Directors being statutory directors at the time all or some of the Prior Dividends were paid, Numis Securities Limited, in its capacity as Nominated Adviser to the Company for the purposes of the AIM Rules, considers that the Resolution (and specifically the entry by the Company into the Shareholders' Deed of Release and the Directors' Deed of Release) is fair and reasonable insofar as the shareholders of the Company are concerned.

The Board has reviewed its policies and procedures in connection with the making of future dividends in compliance with relevant statutory requirements and, in particular, to confirm whether the last set of accounts filed at Companies House show sufficient distributable profits to cover the relevant dividend or if interim accounts need to be prepared and filed ahead of any proposed dividend.

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