AIM advisers have hammered home the message that complacency is not an option
as the exchange prepares to shoulder the IFRS burden.
The warning was delivered as the junior exchange held its annual conference
at the London Stock Exchange at the end of last month.
Richard Thornhill, a director at Deloitte’s AIM transaction services team,
urged companies not to underestimate the amount of time it would take to
implement standards, and to focus their efforts on the minefields of share-based
payments, dividend treatment and financial instruments.
Thornhill warned that international financial reporting standards were
complex for good reason.
‘The complexity of the standards is understandable, because there are a lot
of people to please, especially the investors,’ he said.
The highly acquisitive AIM exchange is bracing itself for a make or break
juncture in its history as the bulk of its listed companies gear up to prepare
their 2007 interims under the tough umbrella of IFRS requirements before the
2008 deadline for full compliance for annual reports.
Setting aside enough time was the overriding theme of the conference, but the
summit addressed a wide range of topics, including the eagerly awaited rule book
for nominated advisers (nomads).
‘In order for AIM to move to the next stage there are some advisory standards
that need to be met,’ said Philip Secrett, a member of the exchange’s advisory
Adam Hart, the board’s chairman, said: ‘The guidance shows what’s expected of
the nomads and the companies here.’
On the whole, the panel was in a bullish mood on the London-based exchange’s
prospects despite criticism of its regulatory standards.
‘When AIM was designed, I don’t think any of us thought it would be in this
position when we started more than 10 years ago,’ Secrett said.
The exchange was also licking its lips at the prospect of more foreign
companies joining. Panel members believe that AIM can expect an influx of
listings from China, Canada and Russia in particular.
The expectation of more arrivals from the Commonwealth of Independent States
comes as companies in Russia seek to fundraise for the 2008 presidential
Despite the positive sentiments, AIM was rocked by profit warnings issued on
the same day that the conference began. Torex Retail, I-Mate, Synexus Clinical
Research and 32Red all issued cautions as the summit got under way.
John Thain, chief executive of the New York Stock Exchange and one of AIM’s
most prominent detractors, also delivered a stinging attack.
He told a media briefing at the World Economic Forum in Davos, Switzerland,
that AIM lacked the stringent corporate governance requirements for listed
He also claimed that the London Stock Exchange was changing its approach
‘particularly in relation to AIM, where it did not have any standards at all and
anyone could list’.
The AIM advisory board also addressed how the fall-out of the US clampdown on
overseas gaming companies had affected the market.
Hart said that the crackdown had severely tested the nomads’ dual role of
advisers and regulators, as panicking companies clamoured to sell off their US
operations at the best price.
He also identified a tug of war between getting the most for the company and
serving the needs of shareholders. Even though companies needed shareholder
approval when selling off more than 75% of their operations, Hart said that
corporates may have ‘disadvantaged their shareholders by doing so’.
With more than 1,600 participants, AIM is clearly a popular market for
companies to list on, but competition between exchanges could increase. Next
month Alternext, the junior market launched by Euronext in 2005, is staging a
conference in London to attract UK companies.
Ruby crowned queen of Mitie
Ruby McGregor-Smith has been appointed the new chief exec of FTSE 250 support
services company Mitie. She has completed her meteoric rise to the top job in
less than five years after joining the board in December 2002 as group FD.
McGregor-Smith succeeds Ian Stewart, who will retire from his position before
taking up the role of deputy chairman. McGregor-Smith said: ‘I am delighted to
have been appointed as chief executive of Mitie. I would like to thank Ian in
particular for the support that he has given me.’
Lost appeal sends Shelton to slammer
E Kirk Shelton, former vice-chairman of travel property group Cendant, will go
to jail after losing an appeal against his conviction in a $3bn (£1.5bn)
accounting scandal at the company. Shelton was sentenced in 2005 to 10 years in
prison on conspiracy and fraud charges and ordered to pay $3.27bn to Cendant.
This week he was ordered to report to prison on 20 February. He has been under
house arrest pending appeals against his convictions, which were upheld in
November. Earlier this year, former Cendant chairman Walter Forbes was sentenced
to 12 years and seven months in prison and also ordered to pay $3.3bn in
PwC saves 3,200 jobs
at clothing chainAdministrators appointed from PricewaterhouseCoopers have saved
more than 3,000 jobs from the axe after hammering out a deal at clothing
retailer Adams Childrenswear. David Hargrave and Michael Jervis have sold the
majority of the business and the group’s assets to a newly formed company backed
by retail entrepreneur John Shannon. The deal means that 273 Adams stores across
the UK will remain open, giving a lifeline to 3,200 employees. Hargrave and
Jervis were appointed as joint administrators on 1 February 2007. Operating from
its base in Nuneaton, Adams is the largest specialist retailer of children’s
clothing in the UK with an annual turnover of £200m.
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