Is tide starting to turn for quoted firms?

Feb 13 2008 by Bill Gleeson, Liverpool Daily Post

THIS time last year, you could hear me complaining loudly about the rate at which the region was losing its stockmarket-quoted companies.

In recent years, several large local companies have delisted from the London Stock Exchange’s Full List. Their number includes Pilkington, Mersey Docks and Harbour Company and Stanley Leisure, all of which delisted after being acquired by foreign or privately-owned businesses.

The region could ill-afford to lose them. Merseyside already had a low number of quoted companies. The area hosts about half a dozen listed firms when a place with Merseyside’s population ought to have nearer 50. The same is true of the London Stock Exchange’s junior market, the Alternative Investment Market (AIM).

But recently we have seen signs of change.

Last year, Cains Beer Company listed on AIM using a reverse takeover of Preston pubs group Honeycombe Leisure. Yesterday, we heard news that Water Street- based Midas Capital Partners was to list using a reverse takeover of a rival fund management group that already had its own listing.

A swallow doesn’t make a summer, and two AIM listings don’t amount to a boom in flotations, but they are a step in the right direction.

Midas has reached this milestone in its short history very quickly. Started by Simon Edwards almost six years ago, it has gone from strength to strength. Ten months ago, it reached another milestone when the amount of funds it had under management passed the £1bn mark. Since then, that sum has risen by another 70% to hit £1.7bn.

So congratulations are certainly due to Mr Edwards and his team. He is, however, a modest man and has no intention of going wild with the £20m he has pocketed from the deal. Instead, he is investing it in the funds he runs. If it were me, I would buy the Porsche.

‘TAXES are the price we pay for civilisation.”

These are the words of American physician and poet Oliver Wendall Holmes immortalised in stone above the main entrance of that country’s Internal Revenue Service.

It’s all the more surprising then that a number of Americans and other rich foreigners living in Britain get away with paying less tax than the rest of us.

That’s because they take advantage of Britain’s “non-domiciled” tax loopholes.

If you are a foreigner living in this country, your overseas assets can become exempt from taxation in the UK. The arrangement contrasts with the position facing Britons who must pay tax on income earned from overseas investments.

What compounds the obvious unfairness of the different rules is that some non-doms, as these foreigners are called, channel earnings made from their UK activities through their overseas assets, thereby avoiding tax that would otherwise be payable in the UK.

Nor is it just a small number of Russian oligarchs and American private equity investors that are using the non-dom arrangements. One estimate puts the number of non-doms in Britain at 35,000.

These people are now moaning about the fact that the Chancellor, Alistair Darling, wants to tax them £35,000 as a one-off charge if they stay here for more than seven years. And yet they protest, despite the fact they would still be getting away lightly.

Some fear the non-doms would leave Britain if they lost their tax status and argue that it is in the country’s interest to keep them and their investment cash here.

Yet that seems far too pragmatic and generous a concession. The Chancellor should stick to his plans and not cave into pressure.