Stock exchange delists third-party litigation funder

Jersey: CISE said Argentum is no longer suitable for listing

Third-party litigation funder Argentum Capital was delisted by the Channel Islands Securities Exchange (CISE) this week.

Argentum – whose non-executive chairman is former Court of Appeal judge Sir David Keene – has gained a high profile in recent months due to its backing of the Stewarts Law action brought by institutional shareholders against RBS over its 2008 rights issue.

The CISE said it had cancelled the Jersey-based company’s listing “on the basis that the Exchange considers that the company is no longer suitable for listing under chapter 7 of the Listing Rules”.

Chapter 7 deals with the listing of investment funds, but a spokeswoman for the CISX declined to give any more detailed reason for its decision.

However, a statement on the Argentum Group’s website said: “As advised by the CISE to the company, the reason for the cancellation of listing was that the company was not in compliance with those provisions of the rules requiring there to be an adequate market in the company’s securities.

“The specific rule relied upon by the CISE was rule, which requires at least 25% of an investment fund’s securities ‘be in the hands of the public in such proportions so as to satisfy the Exchange that there will be an adequate market in the securities’. The company makes this announcement to clarify the basis of the CISE’s action.”

The news came the week after a US-based website called OffshoreAlert made serious allegations about the activities of Centaur Litigation SPC, an investor in Argentum.

Argentum has released a separate statement in response to the story and any implication that the group “is in some way involved in the matters alleged”.

It said: “The Argentum Group denies any knowledge of or involvement in the matters alleged. Centaur Litigation Limited is an investor in Argentum Capital Limited and an investor in certain third-party litigation claims managed by Argentum Investment Management Limited.

“Argentum Investment Management Limited is not and was never the global investment manager for Centaur Litigation Limited or Centaur Litigation SPC. No member of the Argentum Group is or was in any way involved in the fundraising activities of Centaur or its dealings with its investors.

“Full details of the Argentum Group’s structure, activities and financial position and the terms and nature of Centaur’s investment in Argentum Capital Limited are set out on the group’s website and in the offering memorandum and audited accounts that are available there.”

Argentum is a member of the Association of Litigation Funders (ALF). In a statement, it said: “The board of the ALF has been concerned to read press reports alleging irregularities in fundraising activities at Centaur Litigation SPC. Centaur is a major investor in Argentum Capital Limited (ACL). ACL is a funder member of the ALF; Centaur is not.

“The ALF was also concerned to learn that the listing of ACL shares on the Channel Islands Securities Exchange Authority was cancelled on 24 February 2014 on the basis that the Exchange considers that ACL is no longer suitable for listing under Chapter 7 of the Listing Rules.

“The ALF has been in urgent contact with ACL since the press reports first appeared seeking to understand the implications of these developments and those contacts are continuing. No complaint has been received by the ALF from any of ACL’s funded counterparties. No further comment will be made by the ALF at this stage.”

Centaur owner Brendan Terrill told this website that he had no comment except that the matter was with his lawyers.

Clive Zietman, head of commercial litigation at Stewarts Law, said the firm was aware of the issue but had no comment.

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