Tesco’s UK Chief Operating Officer sells £200,000 worth of shares eight days before profit warning
On 5 January 2012 Tesco plc issued an RNS statement that its UK Chief Operating Officer, Bob Robbins, who is also on the company’s Executive Committee (but not a main Board director), sold 50,000 Tesco shares on 4 January at 404p each, realising just over £200,000.
On 12 January 2012 Tesco issued a trading statement, which was effectively a profit warning, and its share price fell 15% on the day, closing on 13 January at 316p. Had Mr Robbins sold his 50,000 shares after that trading statement, he would have made around £40,000 less from the sale.
The 5 January RNS statement concerning Mr Robbins’ share sale was issued because he is, for the purposes of the FSA’s Disclosure and Transparency Rules, a “person discharging managerial responsibility” (PDMR), and so his dealings in Tesco shares have to be reported to the market, as required by DTR 3.12 and 3.1.4. A PDMR who is not a board director is a:
“senior executive of such an issuer who:
(i) has regular access to inside information relating, directly or indirectly, to the issuer; and
(ii) has power to make managerial decisions affecting the future development and business prospects of the issuer.”
Tesco is quoted in the Daily Telegraph as denying that Mr Robbins was in possession of any inside information at the time of his share sale (which Tesco states was for “necessary family expenditure”) – although Tesco’s explanation is a little convoluted, as it appears to admit that Mr Robbins may have been aware of the company’s poor Christmas trading.
Mr Robbins still holds 1.4 million Tesco shares, on which the total dividend payment in 2011 would have been £217,000.
Friendly Corporate PSL
To subscribe for our free weekly update e-mail, click here.