15th Aug 2019 16:30
(Alliance News) - Shares in litigation finance firm Burford Capital jumped on Thursday after it announced plans to introduce a US listing alongside its London shares and sought to allay concerns by replacing its finance chief.
Shares in Burford were 13% higher at 880.00 pence in London on Thursday, still around 40% lower since the start of August.
Burford said it was seeking a US listing - preferably on the New York Stock Exchange of Nasdaq - in order to "access a broad pool of US investors who do not today invest in litigation finance but are generally familiar with US litigation."
Meanwhile, Burford also replaced its finance chief amid criticism from a US research firm that she was married to the chief executive at the firm.
Last week, Burford was targeted by short-seller Muddy Waters Capital for being "a poor business masquerading as a great one" and describing the firm as "arguably insolvent". The report had sent the shares sharply lower.
Amongst the detailed criticism of Burford, Muddy Waters included the fact that CEO Christopher Bogart and CFO Elizabeth O'Connell were married to one another.
On Thursday, Burford confirmed O'Connell would be demoted to chief strategy officer with former Morgan Stanley executive Jim Kilman becoming finance chief. Kliman is a former vice chair of Margan Stanley Investment Banking and has spent his career in specialty finance.
Burford emphasised the plans for a US listing have been under way since "well before" recent events with Muddy Waters. Should a US listing be unachievable, the firm would instead seek a premium listing on the LSE.
In response, Muddy Waters described the move to replace the finance chief as farcical.
"The notion that appointing Kilman as CFO will substantively improve governance is a farce," Muddys Waters founder Carson Block said.
"It is clear from this that Burford is more interested in imposing fig leaves than real guard rails," Block added. "We note Kilman was Burford's principal investment banker at Morgan Stanley. Burford investors would be much better served by a CFO from the outside who is untainted by Burford's conduct to date."
"Given the complexity of Burford's accounting, the CFO should be an accountant who has demonstrated a strong commitment to ethics," Block continued. "Investment bankers don't often qualify on that front."
Related Shares:
Burford Capital