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Astaire Group
- BY: Andrew Hore |
- POSTED: 07/06/2010 |
- COMMENTS: Add yours
Aim adviser Astaire’s subsidiary Rowan Dartington has been fined £511,000 for administrative breaches between May 2007 and September 2009.
Private client broker Rowan Dartington was given a 30% discount on the original fine of £730,000 because it cooperated with the FSA. (http://www.fsa.gov.uk/pubs/final/rowan_dartington.pdf)
Astaire paid £13.4m for Rowan Dartington in February 2006. A new software system installed in May 2007 caused the problems. The software was not tested properly and the company’s controls broke down. The fine relates to the handling of client money. However, no client lost any money because of these problems.
Firms are required to keep client money separate from the firm’s money in segregated accounts with trust status in order to protect them from the insolvency of the firm.
Astaire initially said that it had up to £1.4m of unreconciled debtor balances but this has been reduced to £1.04m and this figure is provided for in the 2009 accounts along with the fine. Rowan Dartington will still try to recover this cash.
Astaire has also reported its 2009 figures. Astaire reported an increase in its underlying loss from £2.3m to £3.7m. This excludes intangible write downs and £897,000 of restructuring costs. Overall, turnover rose from £11.9m to £13.7m.
The net asset value of the business was £14.3m at the end of 2009 and there was still net cash of £7.81m.
Astaire has been hit by a claim from lawyers for Izodia for £4m plus interest. This relates to a dormant subsidiary which was involved in a concert party that built up a stake in Izodia in 2002. The former Aim-quoted software company was the subject of fraud after its cash was transferred out of the business and subsequently disappeared. There is a separate claim of £25,000 against Astaire itself.
Astaire talks about retaining staff through offering them ownership participation in the business. There has also been talk about parts of the company being sold.
The shares have returned from suspension and fallen 1.875p to 1.125p each, which values Astaire at £2.33m.
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