Shares in Quindell, the troubled insurance claims handler, have fallen 28% on their first day of trading since they were suspended in June. The shares fell as much as 40% in early trading and closed down by more than a quarter, leaving the company valued at just under £400m. Quindell, which was briefly viewed as a star stock, was valued at £2.9bn in February 2014 before Gotham City Research, a US hedge fund, published a report attacking its business model.
Quindell suspended its shares on 24 June when it announced an investigation into its past acquisitions. The scandal enveloping the company intensified on Wednesday when the Serious Fraud Office announced a criminal investigation into its accounts. The Financial Conduct Authority is also investigating Quindell, and the accounting regulator, the Financial Reporting Council, is looking into the conduct of two of Quindell’s past auditors, KPMG and RSM Tenon, now part of Baker Tilly.
Quindell’s annual results, delayed from the end of June, revealed on Wednesday that the company had suffered a £238m pretax loss last year as costs, including £157m of impaired assets, jumped to £278m from £44m a year earlier.
Quindell, originally a golf club in Hampshire, used acquisitions of technology businesses to present itself as a company that would revolutionise insurance claims handling. As investors sought out the next big technology business success story last year, Quindell’s shares surged. But the company’s fortunes never recovered after Gotham City Research, an aggressive US hedge fund that bets against companies’ shares, issued a scathing report that said Quindell was a “country club built on quicksand”.
Quindell sold its main claims handling division for £637m in March to Slater and Gordon, a law firm listed on the Australian stock exchange. The deal left Quindell with an array of technology businesses bought during its rapid expansion.
Slater and Gordon’s shares have also been affected by the chaos at Quindell, losing more than half of their value since early April. Slater and Gordon said it had conducted its own examination of Quindell’s books before agreeing the deal and had not relied on the company’s own accounting. The law firm said it believed it had no liability for the various investigations into Quindell.
“It is critical to separate issues associated with Quindell’s historical statutory accounts from Slater and Gordon’s assessment of the professional service division’s value and go-forward performance,” the firm said in a statement to the Australian stock exchange.
