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By Emma Ann Hughes | Published Mar 06, 2012

Life settlement firm confirms boardroom conflict

Insetco has issued a statement to the stock exchange today (6 March) noting the recent movement in the company’s share price and confirming that it is currently in the process of considering changes to the composition of the board of directors.

Insetco revealed its board could be shaken up to resolve a dispute over the management and strategy for the company between the Clive Cooke, chief executive, and Sanjeev Joshi, executive director.

The statement was issued following a sharp movement in the share price on Monday (5 March), when shares dropped from 4.25 pence to four pence.

A shareholder circular and notice of general meeting will be sent to shareholders shortly, at which shareholders will be asked to consider certain resolutions in respect of the board’s composition.

This latest stock exchange announcement comes after Insetco abandoned its bid to buy the struggling life settlements fund Arm Asset Backed Securities in January.

Insetco confirmed that the proposed acquisition had lapsed due to a failure to agree terms with Arm, the Luxembourg regulator CSSF and Ernst & Young, which was appointed supervisory commissioner to Arm in November.

Insetco had already admitted on 24 November 2011 that the deal was in jeopardy in spite of support from Arm investors because of delays to the negotiations with the CSSF.

At the start of this year Insetco said that, although the negotiations had been extended, the proposed deal had now lapsed and Insetco was to resume trading on the Luxembourg stock exchange, having been suspended during the talks according to exchange rules.

The £114m Arm fund was distributed in the UK by Catalyst Investment Group, which was also set to be bought by Insetco as part of the deal.

In September the CSSF issued a statement accusing Arm of issuing bonds to investors for a period of two years in spite of not having the required permissions. It also continued to accept new investments in spite of warnings from the CSSF.

The regulator said it refused to grant Arm a licence to trade in Luxembourg because of the fund’s “inability and/or unwillingness to comply with prudential and legal requirements”.

To counter the claims, Arm launched bid for a judicial review into the CSSF’s decision, as reported by sister newspaper Investment Adviser in December.

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