6th Apr 2021 20:54
City of London Investment Group PLC - specialist asset management company - Becomes aware of issue over payment of certain historic dividends which has resulted in a technical infringement of the Companies Act 2006.
"The issue is of an historic nature and there is no change to the financial outlook of the company as a consequence of this technical matter. It is anticipated it will have no impact on the group's dividend policy or dividend-paying capacity going forward. The company's past accounts will not need to be restated and no dividends are expected to be repaid," company adds.
It continues: "The Act requires it to be demonstrated by reference to accounts filed at Companies House prior to payment that the company has sufficient reserves to pay distributions at the time they are made. Whilst the group has at all times had sufficient distributable reserves on a consolidated basis to pay the relevant distributions, these reserves had not always been distributed upward to CLIG, the holding company, from its operating subsidiaries at the time of declaration."
It notes the relevant distributions were therefore not paid in "strict accordance" with the Act.
"As a result, the group has been advised that, from a legal perspective, it may have claims against shareholders who were in receipt of these relevant distributions and against individuals who were directors at the time they were paid," company says.
As a result, CLIG will hold general meeting to put forward resolutions which will "address the situation". The meeting will look to "put all parties back in the position they were intended to be had the full technical requirements of the Act been complied with at the time the relevant distributions were made."
Current stock price: 514.00 pence, down 1.9% on Tuesday
Year-to-date change: up 17%
By Paul McGowan; [email protected]
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