Shares in struggling Quindell rise on claims it could be broken up after ballooning under leadership of Rob Terry
Shares in scandal-strewn legal software group Quindell rose yesterday following reports it could be broken up.
Under the leadership of Rob Terry the business ballooned by acquiring dozens of firms, including a scaffolding company and a solar panel installation operator.
It could now sell some of these ‘non-core’ divisions, according to reports.
Car crash: Quindell processes insurance claims for insurers among its activities, but its fast-growth story has been replaced by scandal surrounding founder Rob Terry inset
Shares in the group, whose main business is processing insurance claims for law firms, have collapsed by 90 per cent since their peak earlier this year.
Questions over its business model and accounting policies saw shares halve earlier this year.
The stock also dived this month after the opaque fundraising arrangement by Terry and two other directors was disclosed.
Shares fell to a low of 43p last week on the day that Terry was fired, but have since begun climbing back on hopes that fresh management – which has yet to be appointed – will be able to unpick the parts of the company worth saving.
They rose another 15 per cent yesterday to finish the day 11.25p higher at 82p – almost double the price of one week ago.
The rise came as a short selling hedge fund that made millions from betting against Quindell faced a legal crackdown.
US firm Tiger Global used a labyrinth of Cayman Islands-based companies to make large numbers of bets against major European firms from HMV to Nokia.
The law that allowed it to shield its identity – which was only revealed after an investigation by hedge fund specialists at the Financial Times last week – could be scrapped.
MEPs have vowed to ‘rethink the legislation’ that regulates American hedge funds operating in Europe.
The current ‘loophole’ that allowed Tiger to remain hidden for so long is likely to be amended.
German MEP Sven Giegold said: ‘If the European rules allow hedge funds to do this, then the rules need to be changed.
‘Short sellers should be required to declare their identities, and not use offshore companies in this way.’
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