Quindell bosses quit after share deals

Quindell has been plunged into crisis after Rob Terry, the founder, chairman and driving force behind the controversial insurance outsourcer, stepped down.

His departure marks the culmination of a share-dealing controversy that has shocked investors and sent Quindell’s share price to a three-year low.

Laurence Moorse, the company’s finance director, and Steve Scott, a non-executive director, who were both involved in the share deals, are also leaving the Aim-listed insurance claims processor.

Mr Terry, whose departure was first reported on Sky News, will be replaced on an interim basis by David Currie, a non-executive who was appointed to the Quindell board in July.

While Mr Moorse will step down as finance director at the company's next annual general meeting, he will stay on for a year to help with a hand-over.

The latest crisis at Quindell was sparked on November 5, when the company said that the three directors had bought shares using a loan secured against their pre-existing stakes. But growing scrutiny of the arrangement prompted the company to issue a correction last Monday, in which it said the three directors had, in fact, arranged a sale and repurchase agreement with US firm Equities First Holdings (EFH).

Under the deal, the trio had effectively sold shares in order to raise funds to buy more stock. Investors took fright at the news that Mr Terry had sold more shares than he had bought, and the company's stock plunged.

The matter came to a head on Monday, when Quindell revealed that Canaccord Genuity, house broker to the group along with Cenkos Securities, had resigned. The broker gave notice of its resignation on October 21. But investors were only informed of Canaccord’s exit a week after full details of the sale and repurchase agreement with EFH were disclosed to the market.

Although, under stock market rules, members must disclose the resignation of a broker, companies normally wait for the notice period to finish. It is understood that Quindell disclosed the exit of Canaccord on Monday – before the notice period had ended – because it now deemed the resignation as price-sensitive information.

Lorne Daniel, an analyst at finnCap, called for an investigation into Quindell. He said: “No one should be putting money into this stock until there has been a full review.”

In a statement released this morning, Mr Terry said: "I entered into the share transactions announced on 5 November 2014, with the best of intentions for the company and all shareholders and it would have been my intention to acquire more shares were it not for the restrictions due to the discussions leading to this announcement. I am clearly disappointed and sorry that events turned out as they did.

"In view of the share price performance of the last few days, it is likely that a margin call will be made in relation to the share transactions and, at the current share price, I would expect to relinquish my rights to acquire 8,850,000 shares under the EFH sale and repurchase agreement, rather than satisfying the margin call as this would now no longer make economic sense.

"This will draw a line under this agreement and I have no intention of making further use of this agreement or its like again."

Mr Currie added: "Rob is the founder of the business and has made a huge contribution to Quindell's growth to date and the board thanks him for that. We look forward to completing our search for a new chairman and additional non-executive directors as soon as possible."