Control needed on ‘dawn raids’
NZPA-Reuter London A London Stock Exchange committee has criticised; [stockbrokers involved in so-) called “dawn raids." the sudden buying of large blocks .of shares for previouslyunannounced clients. and! suggested new rules to con-j; • trol the practice. I These raids, in which mil-il lions of shares may beh ! bought within a few min- ; ;utes trading, have been used 1 ; several times in the pastil 'few months by various) groups to acquire significant)< (stakes in British companies. |< [The groups have not re-li ■vealed their intentions in ad- ’ vance of buying the shares. I; I The stock exchange com-ll (mittee was set up after the!< 'Anglo-American Mining Cor-ii poration of South Africa, to-)’ .gether with an associated)! 'company, bought 25 per cent (of Consolidated Gold, a lead-11 ling British-based mining;! group. )1 i The February purchase. 1 !
which involved the buying of about SNZ2IO millior worth of shares in about 3C (minutes, was handled b> (Rowe and Pitman, a stockbroking firm which has since been involved in five [Other "dawn raids." i The stock exchange comI mittee said . Rowe and PitIman and .another firm hac ; broken stock exchange etiIquette by not immediately advising other stockbrokers 'of the bids available for [Consolidated Gold shares. | The committee said British .company law should be wid!ened to require disclosure bx ! investors acting together (who begin to acquire sigj nificant stakes in companies. (Present legislation only requires an announcement from an individual buyer who obtains five per cent or more of a company’s shares. When large stakes were to be sold, 30 minutes advance notice should be given to the stock exchange, the committee recommended.
; i The suggestions have gene ito the Department of Trade i! which is still making its I own investigation into “dawn raids." I Concern has arisen that isuch raids may permit forieign groups to buy strategic (British companies. The com!mittee said changes in the ;law to prevent this happening should be considered. i There has also been critijcism that the techniques of ‘stock raids favour large in(stitutions which hold shares at the expense of private (individuals. The institutions (have been geared to take advantage of the high price (offered for shares during ("dawn raids." while individuals have effectively not had (the chance to sell, critics i say. ! Rowe and Pitman said it (had been observing its own (voluntary code on “dawn (raids” for several months ■and criticised some of the (committee proposals as im- : practical.
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Press, 14 July 1980, Page 22
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407Control needed on ‘dawn raids’ Press, 14 July 1980, Page 22
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