The Quotations Committee of the UK Listing Authority today considered a referral from the UK Listing Authority regarding breaches of the Listing Rules by Leicester City plc (the Company). The referral concerned the publication by Leicester City plc of a circular to the Companys shareholders on 29 November 1999. The Committee decided that the Listing Rules were breached and that the Company should be publicly censured.
The Committees decision is summarised below. The full text of the Committees decision is appended to this release.
Summary of case
The Committee decided that the Company had breached paragraphs 14.1, 14.2 and 14.4 of the Listing Rules. These rules require listed companies to seek the prior approval of the UK Listing Authority for all circulars of a non-routine nature issued to shareholders. All circulars issued by listed companies must contain specified information and, under the Listing Rules applicable at the time of the breaches by Leicester City plc, copies of those circulars were required to be lodged at the Company Announcements Office of the London Stock Exchange (the Exchange).
In breach of the Listing Rules the Company failed to obtain the approval of the UK Listing Authority for its circular before sending it to shareholders, failed to include the prescribed information in the circular, and failed to lodge copies of the circular at the Company Announcements Office.
The Company has acknowledged these breaches and, by way of explanation, has stated that the events took place at a time of uncertainty in the affairs of its board. The Committee has taken into account the admission of the breaches by the Company, and the concerns of, and steps taken by, the present directors of the Company to ensure future compliance with the Listing Rules, including closer consultation with its professional advisers.
However, the Committee regards the requirements of Chapter 14 of the Listing Rules as an important protection for shareholders and takes the most serious view of listed companies which disregard those provisions either by oversight or otherwise. In the Committees view the circumstances which the Company has referred to do not excuse its breaches of the Listing Rules set out above.
Background
On 14 September 1999 the Company had announced on the Exchanges Regulatory News Service the resignation from its board of directors of Sir Rodney Walker and John Elsom. Sir Rodney Walker and John Elsom disputed that they had resigned as directors of the Company.
An Extraordinary General Meeting was requisitioned by shareholders supporting Sir Rodney Walker and John Elsom, and proposed resolutions confirming that they were directors or alternatively appointing them as directors of the Company, and seeking the removal from office of four of the Companys then directors, Barrie Pierpoint, Philip Smith, Roy Parker and Gilbert Kinch.
The EGM was to be held on 22 December 1999, the same day as the Companys Annual General Meeting. The notice of the EGM was issued by the Company on 29 November 1999 together with the Companys annual report and accounts, a covering letter giving details of the EGM and AGM, and a circular from the four directors whose removal from the board was sought by the requisitioning shareholders, recommending that shareholders vote against the resolutions proposed for the EGM.
The circular was not submitted to the UK Listing Authority for prior approval nor did the Company seek the approval of its professional advisers before issuing it.
On 20 December 1999, Messrs Smith, Parker and Kinch resigned from office as directors of the Company. On 22 December 1999 Mr Pierpoint was removed from office as a director of the Company by ordinary resolution of shareholders at the EGM.
Notes for editors
1. Under the Official Listing of Securities (Change of Competent Authority) Regulations 2000 (the Regulations) the functions of the UK Listing Authority were transferred to the Financial Services Authority with effect from 1 May 2000. The UK Listing Authority has responsibility for, amongst other things, enforcement of the Listing Rules.
2. The Regulations also enable the Quotations Committee of the UK Listing Authority to take action under paragraph 1.9 of the Listing Rules in respect of breaches that occurred before 1 May 2000. The Listing Rules applicable at the time of the breaches referred to above were those published in January 1999.
