SHARES IN Worldspreads, the Dublin-headquartered spread betting group, were suspended on Dublin’s Enterprise Securities Market and London’s Alternative Investment Market (Aim) yesterday, after “possible financial irregularities” were identified.
On Wednesday, the company announced that co-founder and chief executive Conor Foley, who owns about 18 per cent of the firm, was stepping down to “pursue other interests”.
However, according to Lindsay McNeile, executive chairman of Worldspreads, yesterday’s announcement is unrelated to Mr Foley’s decision to step down, and is an entirely new development.
“We had no idea of it until this morning,” he said of yesterday’s discovery.
In a statement, the company said that it has suspended trading pending clarification of its financial position.
“Given the uncertainty as to the outcome, Worldspreads is currently unable to assess its financial position, and inform the market accordingly, and considers the suspension to be appropriate. The group expects that the suspension will remain in force until such time as Worldspreads is able to determine with sufficient clarity the group’s financial position,” it said.
While shares have been suspended, the company is still in business, although it may now fear that given the financial uncertainty, investors may look to cancel their accounts and move their money elsewhere.
Last year, Worldspreads recorded an operating loss of almost € 800,000 and it revealed in a trading statement last month that it had been experiencing “an unusual pattern of client trading”.
According to Duncan Hall, a London-based analyst with Finncap, it is a difficult environment at present for spread betters, given that the business is “all dependent on people losing money”. In the current environment, there is little appetite for that.
Niall O’Kelly, chief financial officer, also left the firm on Wednesday, having previously submitted his notice in February, while former international footballer Kevin Moran resigned as a non-executive director from his position in November.
Last June, former minister for finance and EU commissioner for internal markets Charlie McCreevy joined the board of Worldspreads as a non-executive director.
