Sirius had around 85,000 individual shareholders at one point
An influential shareholder organisation is assembling a legal case against Sirius Minerals after thousands of ordinary investors saw their savings and pension pots wiped out.
Sharesoc, which represents retail shareholders, has spent months investigating Sirius’s near-collapse and eventual £405million sale to FTSE 100 miner Anglo American at the start of this year.
The legal claim would centre on allegations that Sirius misled investors about the state of its financial health before a failed fundraising last autumn. It is seeking to win compensation for former investors.
For years Sirius was one of Britain’s most popular retail stocks and at one point had around 85,000 individual shareholders.
Bosses – including chief executive Chris Fraser – spent years winning planning permission for its £4billion fertiliser mine under the North York Moors National Park and many of its backers were locals.
The company rocketed in value and shares hit a peak value of 44p in 2016 – it was listed on the FTSE 250 between 2017 and 2019.
But last September a plan to raise £400million in debt – which would have unlocked another £2billion in funding – failed and within months the company was teetering on the brink of collapse. The speed of its deterioration shocked long-time investors.
The eventual 5.5p per share takeover offer from Anglo was branded a ‘mockery’ by Crispin Odey’s hedge fund Odey Asset Management.
Furious individual investors said it was ‘daylight robbery’ and that it would put them off dabbling in the stock market for life after many lost tens of thousands of pounds.
Sharesoc director Cliff Weight said: The Sharesoc Sirius Shareholders’ Group has spent a considerable amount of time in the last few months preparing a review and sifting through thousands of documents and videos, as we get ready to discuss the situation with legal firms. Then we will know if there is a case.
He said, as part of that process we are holding a virtual conference today to share updates with former shareholders.