FSA serves up £210k fine to former Morrisons chief

Sir Ken Morrison is in trouble with the authorities, after he failed to notify them when he sold a raft of shares.

by Emma Haslett
Last Updated: 06 Nov 2012
Former Morrison’s CEO and chairman Sir Ken Morrison is in the doghouse with the Financial Services Authority today, after it fined him £210,000 for breaking rules on ‘disclosure and transparency’ when he divested himself of shares in the company worth more than £450m. Sir Ken, whose father, William, started the company in 1952, insists he didn’t mean to do anything wrong. But, despite the fact the full fine could have been as much as £300,000, had he not been given a discount for good behaviour, it’s still a pretty expensive oversight…

It’s a fairly convoluted story, but the basis of it is that when Sir Ken retired from Morrisons in 2008, he began putting millions of shares in family trusts, which had the additional advantage of saving him a cool £100m in capital gains tax when the rate was raised from 10% to 18%. That reduced his shareholding in the company down to 6.38%, but by March this year, that had plummeted again, to 0.9%. The FSA ruled that by not telling Morrisons or the stock market about the movements in his holding, Sir Ken was breaking stock market rules.

The FSA was keen to impress that Sir Ken didn’t benefit financially from it, but it stressed that the market was ‘misled’ as to the ownership of voting rights at Morrisons. ‘It is important that significant shareholders recognise that timely and accurate disclosure of their shareholdings and voting rights is a fundamental component of a properly informed securities market,’ it added, in a rather po-faced manner, wethinks.

Sir Ken, who famously set his company back several years when he dismissed home delivery as something he did on his bicycle when he were a lad, is about to celebrate his 80th birthday, so perhaps it could have cut him some slack. But the FSA maintains that he should have known better. ‘A man in Sir Ken’s position should have been aware of his obligations,’ it said, sternly. Well. That’ll learn him…

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