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Rosengren backs Lighthouse rebels over delisting
by Jun Merrett on Jul 25, 2012 at 10:17
Allen Rosengren, former chief executive of the Lighthouse Group has backed growing opposition to the company's plans to delist from the Alternative Investment Market (AIM).
Rosengren (pictured), who has a 15% shareholding in the company said: 'The board of directors of a business that has gone through the process of becoming quoted and, in doing so, sought external private and institutional investors ... owes it to those shareholders to continue to operate as a listed entity, or make a sensible cash offer for their shares.'
Paul Mumford, fund manager at Cavendish Asset Management, who owns shares in the Lighthouse Group in his AIM fund said he welcomed Rosengren’s support for the rebellion against Lighthouse’s proposal to delist.
Mumford had spoken out against Lighthouse’s proposal several times, branding it ‘shoddy’ and said the majority of private investors would not want to hold shares in an unquoted company.
Mumford said: ‘Allen’s intervention demonstrates the credibility of the rebel case, given his previous position as joint chief executive and his extensive experience with and knowledge of the business, as well as the wider industry.
‘The current management is looking ever more isolated in their stance that delisting is in the best interests of the company’
Lighthouse first proposed to delist from the AIM market in early July, citing regulatory burdens and a wave of mis-selling claims in the IFA sector as reasons for a drop in appetite for shares in advisory businesses.
The board published a statement earlier this week in an attempt to get shareholders to back the move, stating it would not lead to relaxed standards of corporate governance.
The move has been criticised by Mumford and shareholder group Sharesoc for the impact the announcement had on the company’s share prices which fell from 5.75p to 3p the day the announcement was made.
Mumford suggested Lighthouse should buy out shareholders at the shares’ values before the delisting announcement and suggested that the directors were looking for a quick sale of the company.
David Hickey, Lighthouse executive chairman, told New Model Adviser that the directors had no plans to sell their stake in the company or mount a takeover bid as the Financial Services Authority's capital requirements were too onerous. Hickey also claimed the move was supported by 90% of the company's shareholders that he had spoken to.
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