Liquidator in shock move to sell shares

THE security of billions of euro in shares held electronically for Irish shareholders will be compromised if the country's top liquidator succeeds in selling shares held in trust by a stockbroking firm in receivership.

In an unprecedented manoeuvre, Tom Grace of Pricewaterhouse Coopers is to seek the approval of the High Court to sell shares belonging to 1,850 people who were clients of W&R Morrogh, which went into liquidation with a shortfall of 10 million in April of last year.

If Mr Grace is successful it will change the status of shares held in trust electronically by Irish financial institutions in nominee accounts. In effect it will mean that in all future liquidations or receiverships of stockbroking firms the receiver will be able to access and sell off the individual shareholding of clients who deal with the firm.

The proposed move has incensed former clients of W&R Morrogh who have seen their investments fall dramatically in value in the stock market slump, as their shares have been tied up as a result of the liquidation and they are unable to trade them.

Disgruntled clients have formed the Morrogh Action Group and committee member David Beechinor said: “The receiver wants to use investors’ money, to pay his legal costs to go to the High Court, to take the investors shares for his own use and pay for the expenses of the receivership.”

The Morrogh Investor Action Group solicitors have received a letter form Whitney Moore and Keleher, solicitors., for the receiver, stating that: “Unfortunately there is no doubt in this case due to the scarcity of assets but that at least part of the Receiver and Manager’s fees and expenditure will have to be paid out of clients’ funds and or investment instruments (subject to the approval of the Court).”

Another committee member Kieran Coogan said: “When Morrogh’s went into receivership, my shares were worth at least five times what they are now.

“If this category of shares belong to the investors, then they should not be under the control of the receiver and be released without delay.”

Mr Beechinor and Mr Coogan say they need more Morrogh clients to join their group to help fund a High Court challenge to Mr Grace.

Mr Coogan said if Mr Grace succeeds it will have serious implications and repercussions for the Irish investment and securities industry as a whole.

The Irish Stock Exchange would not comment on the action proposed by Mr Grace.

A spokesman for the Central Bank, the regulator the Irish stockbroking industry, said it was a matter for the receiver.

Investors who want to contact the Morrogh Action Group should contact can call Kieran Coogan at 087-2355260 or e-mail: [e-mail]