PracticeConsultingDTI probe underway at Claims Direct

DTI probe underway at Claims Direct

The Department of Trade and Industry is conducting an investigation into personal injury claims company Claim's Direct.

Althought the exact nature of the probe is unclear, it has been suggested it could focus on the collapse of the company’s share price from 180p to just 12p, following two profit warnings issued after the company went public.

The most recent warning came at the end of March, just days before the company announced annual losses of Pounds 20.2m and followed a slew of bad press coverage for the company.

This culminated in a drop in customer levels and last month Claims Direct said it expected to take a Pounds 5m charge in its first and second half results to make extra payments to clients.

Paul Doona, managing director and former finance director at Claims Direct, said he was unaware of the exact purpose of the inquiry, but said investigators had asked for to see ‘financial and other documents’.

A DTI spokesperson refused to confirm or deny an investigation was taking place.

News of the investigation follows a hostile takeover bid by company founders Tony Sullman and Colin Poole.

The pair, who have a combined shareholding of 43%, are attempting to buy a controlling interest in Claims Direct for a mere 10p a share. Barker Securities, the investment channel of Sullman and Poole, would only need a few share holders to agree to sell to reach the all-important 50.1% level.

Links

Claims firm fights profit drop

Claims Direct annual results

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