FSA has fined former Morrisons chairman Sir Ken Morrison £210,000 for failing to disclose his reduced shareholding and voting rights in the supermarket chain.
Morrison retired as chairman of the supermarket in 2008. Shortly after his retirement, the company announced on March 28, 2008 that Morrison had a notifiable holding of voting rights of 6.38 per cent, worth £450m.
Between 2009 and 2010 Morrison cut his shareholding from over 6 per cent to 0.9 per cent, but failed to notify the company on four separate occasions when his voting rights fell below 6 per cent, 5 per cent, 4 per cent and 3 per cent.
No further shareholding notifications were made until March 1 this year, almost three years after the original holding announcement.
The FSA says Morrison did not financially benefit from these breaches of the regulator’s disclosure and transparency rules.
However his failure to notify the company of the changes to his shareholding meant the supermarket could not update the market in accordance with regulatory rules.
The FSA says this led to the market being misled about the ownership of voting rights in Morrisons.
FSA acting director of enforcement and financial crime Tracey McDermott says: “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.”
McDermott says investors are entitled to know when major and influential shareholders significantly reduce their interest in a listed company, and that Morrison should have been aware of his obligations to notify the market that his stake had reduced.
She adds: “The rules are designed to enhance transparency and provide investors with timely information regarding voting rights in issuers. Failure to comply with the rules risks damaging investor confidence in the financial markets.”