The Times - UK (2022-05-28)

the times | Saturday May 28 2022 2GM 51

Business

Callum Jones
US Business Correspondent
David Byers

America’s senior financial regulator has
told Elon Musk that it believes he
breached market rules by failing to
swiftly disclose his $2.6 billion invest-
ment in Twitter.
Officials have asked the world’s rich-
est man to explain his public challenges
to the social media group while quietly
amassing a vast stake earlier this year.
The Securities and Exchange Com-
mission, which charged Musk with
fraud four years ago after he tweeted
that he had secured funding to take
Tesla private, is now investigating the
run-up to his agreed $44 billion take-
over of the messaging platform.
Musk revealed a 9 per cent interest in
Twitter, rejected an invitation to join its
board and lodged an unsolicited take-
over bid last month. Twitter ultimately
accepted the offer, although Musk has
since threatened to walk away.
In a letter to Musk, released yester-
day, the SEC said his initial disclosure
“does not appear to have been made
within the required ten days” after buy-
ing more than 5 per cent of a company.
While Musk crossed this threshold on
March 14, according to filings, his stake
was not revealed until April 4. Nicholas
Panos, senior special counsel at the
SEC’s office of mergers and acquisi-
tions, asked Musk to supply “additional
information” so that the agency could
“better understand” his disclosure.
It sets the scene for a new clash
between Musk and the regulator. He
has been highly critical of its decision to
pursue him in 2018, describing some of
its investigators as “bastards” and alleg-

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Boohoo, the online fast-fashion
retailer, is working on a pre-pack rescue
deal to buy Missguided, its financially
stricken rival.
Sources said Boohoo had entered
into exclusivity talks with Missguided’s
advisers at Teneo and that a deal could
be struck by Monday.
They cautioned that a rescue was not
yet finalised and did not have details on

Boohoo prepares to rescue stricken rival confronted by suppliers

Ashley Armstrong Retail Editor how many jobs could be protected, or if
Boohoo was restricting its interest to
the brand rather than the entire
business. Boohoo declined to comment
and Teneo did not respond to requests
for comment.
Pre-pack deals require a business to
become insolvent before being sold,
often allowing a buyer to ditch liabilities
including pensions and property debts.
Missguided was hit with a winding-
up order by one of its suppliers last

week and shut its offices after staff were

doorstepped by factory owners who

said that their bills had not been paid.

One source said: “It was very confron-

tational.”

A spokesman for Missguided said

that it was “aware of the action being

taken by certain creditors of the com-

pany in recent days and is working

urgently to address this. A process to

identify a buyer with the required

resources and platform for the business

commenced in April and we expect to

provide an update on progress in the

near future.”

Boohoo has doubled its stable of

brands after buying Debenhams, Coast,

Karen Millen, Dorothy Perkins, Oasis

and Warehouse out of insolvency pro-

cesses. Last month Nitin Passi, who

started Missguided in 2009, stepped

down from the company as it admitted

it was looking for a new backer — just

months after Alteri, which invests in

distressed retailers, took a 50 per cent

stake.

Passi was regarded as one of the stars

of the new fast-fashion scene and was

known for driving a £300,000 pink

Lamborghini covered in pictures of

Pamela Anderson.

Boohoo has also been under pres-

sure, with its shares losing almost three

quarters of their value in the past year

as investors turned their backs on so-

called “pandemic winners”.

US financial watchdog renews clash with Musk

Twitter bid

broke rules,

says regulator

ing that they had unlawfully forced him

to settle the charges.

Musk, 50, is chief executive of Tesla,

the electric carmaker, and SpaceX, the

rockets and satellites group. The tycoon

has a personal fortune of $228 billion,

according to Forbes, largely derived

from stakes in the two businesses. A

representative of Musk did not respond

to an invitation to comment yesterday.

Musk has faced mounting scrutiny of

his pursuit of Twitter, whose shares he

started to buy at the end of January. He

has been sued by investors in the com-

pany, who allege that he saved $156 mil-

lion by delaying the disclosure of his

stake as he acquired more stock.

“Musk engaged in market manipula-

tion and bought shares at an artificially

low price,” the investors, led by William

Heresniak, a Virginia resident, said.

Their lawsuit, filed in San Francisco

this week, also accuses Musk of

attempting to drive down the share

price this month by saying his takeover

was “temporarily on hold” until Twitter

clarified statistics on the number of

fake accounts on the platform.

To settle the SEC’s fraud charges in

2018, Musk agreed to step down as Tes-

la chairman and paid a $20 million pen-

alty fine. He has since stated that the

SEC was aware that he had secured

funding to take Tesla private. The agen-

cy declined to comment on his allega-

tions in April.

Shares in Twitter — which Musk has

agreed to acquire for $54.20 per share

—closed up 65 cents, or 1.6 per cent, at

$40.17. Tesla rose 7.3 per cent, or $51.90,

to $759.63, helping to lift the S&P 500

by 2.4 per cent to 4,158.24 for its largest

weekly percentage gain since Novem-

ber 2020.

PRINCESS YACHTS

Making waves Britain’s biggest luxury yacht-builder is being put up for sale with bankers at Macquarie tasked with finding

a buyer for Princess Yachts, founded in 1965. Several of its Russian-owned vessels were seized recently by the government

Levy wipes £4bn from energy firms

Emily Gosden Energy Editor

Billions were wiped off the value of UK-

focused energy groups this week after

the government’s oil and gas windfall

tax plans threatened to suck in other

power providers.

More than £4 billion has been lost

from the combined value of seven

London-listed groups over the past

week as details have emerged of the

25 per cent energy profits levy on the

North Sea industry and of the chancel-

lor’s plans to extend it imminently to

electricity generators.

Serica Energy, a North Sea producer,

has fallen by 24 per cent since last

Friday, while Enquest is down 17 per

cent and Harbour 15 per cent.

Centrica, the British Gas owner that

has operations in the North Sea and

co-owns nuclear plants, has fallen by

12 per cent. Other power plant owners

have also been hit, with Drax down

almost 18 per cent, SSE 8 per cent lower

and Greencoat UK Wind down by 4 per

cent.

Their combined market capitalisa-

tions have fallen by just over £4 billion.

Analysts at Jefferies believe that

global energy giants such as BP and

Shell should see only “limited impact”

from the changes, and their shares have

largely shrugged off the announce-

ment. However, both companies have

criticised the tax.

Shell, Europe’s biggest oil company,

said yesterday that “in its current form

the levy creates uncertainty about the

investment climate for North Sea oil

and gas for the coming years”. Rishi

Sunak claimed that his tax changes,

which are forecast to raise £5 billion

over the next 12 months, would

“encourage investment, not deter it”

because of tax relief rules which meant

that “the more a company invests, the

less tax they will pay”.

However, companies can only claim

relief for investment in oil and gas, even

though Shell and BP have said that they

intend to focus the majority of their

combined £43 billion UK investment

plans this decade on low-carbon

energy. “Longer term, the proposed tax

reliefs for investment don’t extend to

the renewable energy system we want

to drive forward in the UK and invest in

very substantially,” Shell said. It added:

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