Former chairman of supermarket group says he was not aware of the rules
Ken Morrison, the former chairman of Wm Morrison Supermarkets, has been handed a hefty fine by the UK financial watchdog for his failure to disclose share sales.
The Financial Services Authority (FSA) fined Morrison £210,000 ($348,000) after he reduced his holding during 2008 and 2009 from 6.38 percent to 0.9 percent without informing the supermarket group.
Being unaware of the sales, the company did not update the market as it was required to, and also misstated the former chairman’s ownership of voting rights in its 2010 annual report.
Under the UK’s disclosure rules, Morrison should have notified the company when his percentage of voting rights fell below 6 percent, 5 percent, 4 percent and 3 percent.
Morrison cooperated with the FSA’s inquiry and agreed to settle earlier, which meant his fine was reduced by 30 percent. Without the discount, it would have been £300,000.
The fact that Morrison did not benefit financially from the transactions but still received a large fine demonstrates the seriousness with which the FSA has treated the rule breach.
During the FSA investigation, Morrison explained his failure to notify the company by saying he did not know about the disclosure rule.
‘Investors are entitled to know when major and influential shareholders significantly reduce their interest in a listed company,’ comments Tracey McDermott, acting director of enforcement and financial crime, in a statement.
‘Sir Ken should have been aware of his obligations and his failure to meet them has resulted in this fine.’
