The Department of Trade and Industry (DTI) is to investigate the financial activities of Syrian billionaire Nahed Ojjeh amid allegations that she breached the Companies Act by failing to disclose her share dealings in Cordiant Communications.
Mme Ojjeh has already been publicly criticised by the Takeover Panel for her delay in disclosing share purchases as she built up a near-11% stake in the ailing advertising company (see
Ojjeh Reprimanded Over Cordiant Dealings).
The investor admitted to a lack of familiarity with UK stock market regulations but the DTI will now examine whether the law was flouted. The maximum penalty in this instance is two years’ imprisonment but other options include a fine, censure or both.
The motives of Mme Ojjeh in acquiring a tranche of shares in Cordiant remain unknown but it is believed that she lost around £400,000 after buying the stock at prices well above the 2.5p per share offered by Martin Sorrell’s WPP.
WPP’s £266 million takeover of Cordiant was approved by shareholders last week (see WPP Triumphs In Cordiant Battle) frustrating the ambitions of Active Value which had hoped to wrest control of the company. The fund management group, which has a 28.75% stake, is currently considering whether to take legal action against the Cordiant directors after spending more than £35 million building up its stake.
