The company at the centre of one of the biggest scandals on Aim in recent years has secured court approval to return £414m to investors, providing a boost to its beleaguered shareholder base.
The High Court gave Watchstone, the insurance outsourcer that until last month was called Quindell, the green light for its planned capital return that will see the company distribute funds it raised from the £637m sale of its biggest division earlier this year.
It provides a much-needed lift for Watchstone investors, who have seen the value of their shareholdings plunge after the business was hit by a succession of scandals.
The controversies led to the departure of its former management team, including founder Rob Terry, and culminated in the launch of a Serious Fraud Office (SFO) criminal investigation in August after the company restated past results. Some investors were concerned the SFO probe would jeopardise the cash return.
Shares in the business peaked at 660p in February last year, but stood at 97p at Tuesday’s close, when trading was suspended pending Wednesday’s court ruling. The stock will start trading again on Monday, when a share consolidation will take effect, and the money will be distributed to investors at the end of the month.
Rob Terry, the controversial founder of Quindell who was ousted from the business last year