Financial commentator Ruth Sunderland has called for urgent regulatory intervention to protect vulnerable shareholders from what she describes as 'daylight robbery' through mini-tender schemes. These schemes involve companies making low-ball offers to buy shares from individual investors, often at prices significantly below their market value.
Insurance company Aviva has issued warnings to its small investors about such attempts. According to Sunderland, a company named Litani LLC has sent out official-looking documents offering to purchase shares at a fraction of their worth. Aviva was reportedly compelled by a court ruling late last year to release its share register to Litani, despite attempts to prevent the company from contacting its shareholders.
The Financial Conduct Authority (FCA) in the UK does not directly regulate these types of 'mini-tenders.' However, legal experts suggest that these offers may be classified as financial promotions, requiring approval from a firm authorized by the FCA. In this instance, a firm called Gateway 21, which states it is authorized by the FCA to approve financial promotions, is implicated.
Aviva, which has a large number of individual shareholders due to its formation from demutualized insurance companies, has expressed frustration over its inability to shield these investors. Similar risks may face shareholders in other formerly privatized utilities and telecommunications companies, such as Centrica and BT, which also have substantial individual investor bases.
Sunderland points out that many individual investors in these companies are elderly and potentially vulnerable, making them targets for such schemes. She argues that these scams must be stopped to prevent further exploitation of investors. The article also briefly touches upon the concept of tokenization in financial markets and criticizes poor customer service from companies like DPD, Barclays, and HP, though these points are secondary to the main issue of mini-tender schemes.