Cattles Shareholders’ Association

Shareholders in Cattles Plc have formed an action group and are considering their position in relation to losses suffered in share value as a result of the discovery of an error in the company's accounts and the announcement to the market in February 2009. On that announcement the share value halved, having already lost 90% of its value since September 2008. The shares were suspended and remain in that state, and executives of the company have been sacked. The Regulator has launched an inquiry into the role of the auditors PWC. Parts of the company have been sold off and shareholders face substantial losses. The company has recently restated the 2007 accounts which show a very substantial fall in profit as a result of restatement of provisions.

The position is made worse for many shareholders who participated in the rights issue of April 2008 and who effectively saw the value of shares drop down a precipice over the next few months.

It is recognised that shareholders may be concerned about the adverse effect of any legal action against the company on the value of their shareholding. No specific action has yet been decided but the survival of the company will be a primary consideration before any steps are taken.

The legal team to represent shareholders has been constituted including leading and junior counsel together with forensic accountants.

Your next step

Please register your details if you have been affected by this matter and would like to be kept informed of legal developments. You are likely to have been affected if you held shares in Cattles plc over the past 18 months, even if you have subsequently sold them.

We will be contacting shareholders to advise on any claims arising against the company and/or third parties. Please note that no commitment arises from registration. We will contact you before taking any further steps in the matter.

Background to this matter

Cattles Plc provides financial services to individuals and businesses. The Group specialises in non-standard financial services for customers who do not have access to mainstream credit facilities. More specifically, the Group targets would-be borrowers rejected by high-street banks.

On 23 April 2008, Cattles Plc made a rights issue of new shares at 128 pence per share to raise approximately £200 million. This proposal was made with a view to support the Group’s application for a banking license, as well as to diversify its funding strategy. Cattles Plc stated that the rights issue was to be used as a means by which to diversify sources of funding and to finance the Group’s long term growth.

On 20 February 2009, shares in Cattles Plc fell from 13 1/4p to 6 3/4p, valuing the company at approximately £31 million. Cattles Plc stated that, 'Although it is not possible to determine the outcome of the review at this stage, it is expected to result in profit before tax being substantially lower than current market expectations.' The announcement raised concerns about the survival of the company. Furthermore, the news meant that the consumer borrowers were placed in the precarious position of struggling to pay off debts. Those who took up their rights have lost 96% of their investment.

On 23 April 2009 shares were suspended.

Cattles Plc has restated its accounts for 2007 and published unaudited results for 2008. The 2007 accounts show a very substantial fall in profit as a result of restatement of provisions. At the same time PWC resigned as the company’s auditors.

Edwin Coe LLP

Edwin Coe is a leader in the field of shareholder action groups and has an established track-record and an acknowledged reputation for pursuing such claims. We are ranked as leaders in this field in the Legal 500 and Chambers (UK) directories, and received an award from 'The Lawyer' for outstanding achievement in our representation of action groups.

The establishment of this web page and the formation of the Cattles' Shareholders' Association is in response to inquiries we have received from Cattles shareholders.

In addition to registering your details on the Edwin Coe website, shareholders may wish to visit www.cattlesshares.co.uk from which Barry Dearing, a shareholder, is co-ordinating a resolution that he wishes to submit to the company. If you wish to join with him, please contact him via his website.