Shipbroker Braemar has revealed what it calls a “technical breach” of UK dividend regulations.
The London-listed shop said it has “become aware of an administrative oversight during the company’s financial year ended 28 February”.
It failed to properly prepare and file unaudited interim accounts at Companies House, as required by the Companies Act, before declaring and paying distributions to shareholders.
This involves total payouts of £2.1m ($2.5m), comprising the 1 September 2021 final dividend and 16 December 2021 interim dividend.
The amount paid in error was not revealed.
Braemar said that due to the “administrative oversight”, it did not comply with certain provisions of the Act.
The company had sufficient distributable reserves to make the payments, but they were still made in “technical infringement” of the rules.
“Neither the amount nor payment, nor the company’s prior audited accounts, are affected by this, nor is there any impact on the company’s financial position either at the time of payment(s) or now,” it said.
The consequence is that Braemar may have a claim against past and present shareholders who received the cash, as well as a claim against all directors, past and present, who approved the declaration and payment.
But it said it will ensure no shareholders are put in a worse position as a result of these “procedural oversights”.
No claims will be made
And it added: “The company has no intention to make any such claims against past and/or present shareholders or directors.”
The broker has put forward resolutions for its 19 August annual general meeting to address the issue.
Investors are being asked to approve a deed of release.
This means Braemar will be unable to make any future claims against shareholders or directors, who include chief executive James Gundy, chief operating officer Tris Simmonds, finance chief Nick Stone and chairman Nigel Payne.
Shareholders are also being asked to allow the company to “appropriate” distributable profits equal to the amount of the dividends paid “otherwise than in accordance with the Act”.
The company has still not published annual results for the year ended 28 February that were originally due in May.
Auditors continue to grapple with “complex transactions” carried out near the cut-off point for the accounts.
A second AGM will be convened to deal with matters arising from the annual report when it is published.
