STM appeal date set for 22 January, and will now be public
The Gibraltar Supreme Court has agreed to stay the appointment of inspectors representing Gibraltar’s financial services regulator to oversee STM Group’s alleged failures in compliance and governance until the 22 of January, when an appeal hearing about their appointment requested by STM has now been set, STM announced in a statement to the London Stock Exchange this morning.
As reported, the AIM-listed, Gibraltar-based financial services group has said that the allegations with respect to its compliance and governance are “without merit”, which is why it elected to appeal the appointment of the inspectors last month. STM is understood to be seeking an alternative method of resolving the matter.
In its statement today, STM said that the Gibraltar Supreme Court order confirming the stay of the appointment of the inspectors also indicated that the appeal proceedings would now be heard “and determined” in public, after originally stating that they would be held privately.
Today’s announcement comes a little more than a month after STM chief executive Alan Kentish was arrested by Gibraltar police for allegedly failing to disclose information to the authorities there about a client who had been involved in a tax dispute between two jurisdictions. Subsequently it was revealed that a second, unnamed STM executive had also been arrested at the same time. Both were released later that day without charge.
In a statement to the London Stock Exchange, STM Group didn’t name the client, but said the matter involved a dispute that took place between 2008 and 2013, and concerned Kentish’s role “as a professional director of a client company of STM”. It also said that the advice received by Kentish and by STM was to the effect that the allegations had “no merit”.
At issue in the matter seems to be what the Gibraltar authorities regard as the adequacy of compliance and governance controls in place at STM.
In addition to its base in Gibraltar, STM has operations in the UK, Malta, Jersey and Spain, and maintains a registry office in the Isle of Man. As reported, STM announced in September of 2016 that it had agreed a deal to acquire the UK SIPP provider London & Colonial for around £5.4m (US$7.2m, €6.4m), and last month, said it would buy Malta-based Harbour Pensions Ltd, as it continued a strategy of looking to diversify its business by developing additional products and services for its professional intermediary clients.
STM has been a major provider of qualifying recognised overseas pension schemes to the UK market, and thus took a hit in March when UK chancellor Philip Hammond stunned the pension transfer industry by announcing that a new 25% charge would be introduced on pension transfers to overseas schemes in certain situations, such as when the individual in question is living outside of the European Economic Area and is unable to make a QROPS provision in the country in which they live.
Its shares closed on Friday at 35p – having taken a severe hit in the wake of the recent news of the Gibraltar regulator’s actions last month – which compares with a 51p a share opening price on 8 March, ahead of the Hammond announcement.
The shares then went on to recover from that news to touch 59.5p a share on 12 September, when the company posted its interim results statement.