The FT reports this morning that:
Fund supermarket Hargreaves Lansdown has broken UK company law on dividend payments to shareholders, who include founders Peter Hargreaves and Stephen Lansdown.
The FTSE-100 listed broker admitted on Wednesday that it was “technically” in breach of the Companies Act because it had failed to file accounts justifying its dividend payments.
They’re not alone: other companies including Next have done this recently. No doubt others will follow in their path. And there’s good reason for that. It’s because for all practical purposes no one enforces company law in the UK. It could be argued that the Department for Business, Energy & Industrial Strategy should, but it does not. Partly because that’s because there is almost no one left there. And partly it’s because they pass the buck to Companies House. But Companies House is quite certain it is not a regulator; it says it is only a registrar. And other possible agencies, who do in any event have only very limited scope, such as the FCA, let such matters be swept under the carpet by retrospective action (as will happen here) or a mild wrap on the knuckles.
Ian Gorham, Hargreaves’ chief executive, said it was a case of “not submitting a sheet of paper” to Companies House.
“Effectively, the [Financial Reporting Council] picks accounts at random to review, and it’s quite a substantial review, but they identified a technical issue by [us] not submitting this sheet of paper and we have to go through some bureaucratic hassle to fix it.”
The FRC is enforcing company law, that’s how they got caught.
Ritchie’s position is that we’ve just hung someone for murder therefore we must make murder something we prosecute.