By Evarist Baimu Nyaga Mawalla - Home

financial adviser with its client in respect of the shareholdings of; (a) the financialadviser; and (b) all the investment accounts which the financial adviser manages on adiscretionary basis, where the percentage of the client’s equity share capital held by thefinancial adviser and those investment accounts totals 10 per cent or more; and (6)directors of a company which is subject to an offer or where the directors have reason tobelieve a bona fide offer for their company may be imminent.Note where the panel has ruled that a group of persons is acting in concert, it willbe necessary for clear evidence to be presented to the panel before it can be accepted thatthe position no longer obtains.”It is common ground that Datafin and Prudential-Bache, as the leading financialbacker of Datafin’s bid, are concert parties. According neither could seek to obtainfurther shares in McCorquodale at a price is excess of 315p cash per share, the figure putforward in Datafin’s final offer.It is also common ground that Norton Opax and Laurence Prust/Greenwell Montagu thetwo brokers to the offer whilst acting as such were concert parties, as were Norton Opaxand Samuel Montagu their merchant bankers. So too were K.I.O and Greenwell Montaguwhen acting on their behalf, but K.I.O was subject to no relevant restrictions under therules, provided that it was not acting in concert with one or other of the rival bidders.However, Datafin and Prudential- Bache maintained that K.I.O and Norton Opaxwere concert parties and that K.I.O had acted in breach of the code in authorizingGreenwell Montagu to buy some 2.4 million McCorquodale share on its behalf from SunLife Assurance Society Plc. (“Sun Life”) as a price of 315.5p on 17 November 1986immediately after Datafin had made a final offer of 315p and in assenting those shares toNorton Opax’s offer.The basic facts upon which this charge was founded were as follows. (a) K.I.Ohad a significant interest in the Norton Opax bid being successful, since, in that eventunder the core underwriting arrangement it would be paid about £350,000 inunderwriting fees, whereas it would only receive £35,000 if the bid failed. (b) The£350,000 would be paid by Norton Opax through the principal underwriter, K.I.O beingsub-underwriters. (c) The purchase of the Sun Life shares was suggested to K.I.O byGreenwell Montagu, one of the joint brokers to the Norton Opax bid (d) K.I.O assentedthe shares to the Norton Opax bid. (e) K.I.O could have bought McCorquodale shares onthe market at a price below 315.5p per share before the final Datafin offer was made at315p per share and at a time when Datafin might thereby have been induced to raise itsearlier bid, but failed to do so.On these facts Datafin and Prudential-Bache concluded that there must have beensome agreement or understanding (formal or informal) between Norton Opax and K.I.Oactively to co-operate through the acquisition of shares in McCorquodale in order toobtain control of that company. They further contended that K.I.O as a concert party withNorton Opax had offered Sun Life more than 303.3p per share the Norton Opax cash156