The FTSE 250 business was forced to put out a statement after it emerged that David Daly, 61, had bought 3,912 shares on Monday despite the company being in a closed period.
Frasers Group, owned by Mike Ashley, said that it had “robust procedures in place . . . which were accidentally not followed in this instance”.
The sportswear retailer said that the shares were sold within 15 minutes of their purchase as soon as it came to the company’s attention and that the £156 profit within that timeframe had been donated to charity.
Yes, stupid thing to do. But:
The mistaken share purchase has again raised concerns about corporate governance at Mr Ashley’s business empire and its unorthodox ways of dealing with investors. Shares fell by 6¼p, or 2.15 per cent, to 282¾p.
That’s more stupid.
Errors will happen. It’s how quickly you correct them that matters. And 15 minutes looks pretty good to me.
It’s about the most prole business out there. Of course the Times are gunning for them.
How did he not know one moment and yet know 15 minutes later? Do companies add people to their list of shareholders as quickly as that? If so, pretty impressive.
Because of some minor corporate governance cock-up, the shares fall? The cock-up being a director buying shares (ie, often a longer term buy signal)? I’m missing something…
PF, Maybe it’s because there is a fear, not so much about the governance of the company, but that some boss-boots will decide that “Something must be done about it”….
If the directors are not good at complying with the law, then 3rd party investors have every right to shun them. A director of a listed company disregarding a well-known law about dealing in a closed period!
dearieme,
At a guess he sat at his desk at work and was either overheard of if he did it online said something to someone. Maybe bragging about the purchase?
@ Diogenes
+1
The Director was either deliberately breaking a law or grossly incompetent. In view of the near-certitude that he’d be found out I tend to assume the latter. If he’s that incompetent about his personal wealth, what hope does it give shareholders that he will be a competent guardian of *their* wealth?
@ dearieme
Presumably the “robust” procedures include notifying the Company Secretary immediately (or as near as can be) after he deals as he/she is required to inform the Stock Exchange within a day. Company Secretary (hopefully shouting “you idiot”) points out that deal was against the law.
There’s a slight chance it was just dabbling with a system and an ‘oops’ moment where ‘GO’ was selected instead of ‘VOID’. “Oops. How do I cancel that? Dunno, Bill! How do you cancel an accidental transaction? Dunno, maybe you can’t, just buy it back again.” tick tick 15mins gone past.
I sometimes install shop till scanners, and to test them I have to scan a product, and then void it to stop it being purchased. I scan a 5p biro so that if the touchscreen doesn’t notice me selecting ‘VOID’ and I’ve already moved on autopilot to prod ‘CONFIRM’, it’s a trivial amount that’s gone through, and I put 5p in the till and pocket a spare pen.