TalkTalk was accused of "blatant disregard" of City guidelines after it was forced to seek a £200m cash injection to pay down heavy debts. The Investment Association (IA), which represents most of Britain's biggest investors, attacked the operator for raising the money via a share placing without the approval of existing shareholders. TalkTalk placed new shares equivalent to a fifth of its stock market value, in breach of industry guidelines that set the limit at a tenth. A spokesman for the IA said TalkTalk had violated shareholder rights that are "a vital shareholder protection and their misuse poses a serious threat to shareholder and investors’ interests – the UK’s pensioners and savers". "Businesses have a duty to listen to their shareholders and this placing sets a very damaging precedent for market practices." TalkTalk carried out the placing of new equity alongside a stinging profit warning and its second dividend cut in less than a year. The company’s shares sank to a record low on the latest in a series of downgrades but chairman Sir Charles Dunstone, who reassumed executive responsibilities last year, was defiant. He said: “We’ve had one reset and it ended today. You talk to analysts and people who view the whole world through Excel but in nine months we’ve achieved a phenomenal amount and we’re growing. We’re now fixing the balance sheet.”
The Investment Association (IA) has accused TalkTalk of 'blatant disregard' for City guidelines after it raised £200m in a new share placing to repair its balance sheet without shareholder approval. The placing breached limits set by industry guidelines, said the IA, being equivalent to a fifth of TalkTalk's market value. TalkTalk insisted it had engaged with shareholders and respected their rights. The cash call coincided with a profit warning, citing increased costs from faster-than-expected subscriber growth, and the firm's second dividend cut in under a year. Sir Charles Dunstone has committed to investing £40m of the new cash.