Belfast Telegraph

Court action against under-fire legal funder Burford dropped

The company has been criticised by short-sellers for poor governance and accounting practices, leading to major changes.

Litigation funder Burford Capital has had a legal action against it dropped (Katie Collins/PA)
Litigation funder Burford Capital has had a legal action against it dropped (Katie Collins/PA)

By Simon Neville, PA City Editor

Legal action against litigation funder Burford Capital over allegations of irregular accounting practices has been withdrawn, the company has confirmed.

Burford has been under pressure in recent months following the publication of a report by short-seller Muddy Waters, which questioned the company’s corporate governance and accounts in a scathing report.

In response, the UK-listed business, which funds lawsuits, denied any wrongdoing but agreed to a major overhaul of its boardroom and improvements to accountability.

And on Tuesday bosses were given a boost as they revealed that litigation by investors in the US, which was launched following the Muddy Waters report, had been dropped.

The US securities class action against Burford filed in August 2019 has been withdrawn by the plaintiffs and dismissed in its entirety. There is no litigation pending against Burford at present, other than ordinary course skirmishing within a small number of ongoing funded investment matters Burford Capital

Burford said: “The US securities class action against Burford filed in August 2019 has been withdrawn by the plaintiffs and dismissed in its entirety.

“There is no litigation pending against Burford at present, other than ordinary course skirmishing within a small number of ongoing funded investment matters.”

The company also updated investors on its internal changes, adding that two new non-executives will be unveiled ahead of the annual shareholder meeting in May, and a listing in the US in on its way.

Bosses have said previously that they intend to join the New York Stock Exchange or Nasdaq, although a firm date has not been given.

But on Tuesday the company said: “Burford is now ready to undertake the formal process of seeking a US listing, which is commenced by submitting a registration statement to the US Securities and Exchange Commission.

It added: “Burford’s ordinary shares would trade on both the US exchange and LSE AIM.”

Originally, bosses had looked at moving from London’s junior AIM market to the main London Stock Exchange; however, the rules are stricter and more costly to follow on the main market versus the US rivals.

Other changes also see Aviva Will and David Perla appointed as Burford’s co-chief operating officers.

Craig Arnott becomes Burford’s deputy chief investment officer and Mark Klein, its general counsel, will add the role of chief administrative officer, managing the company’s legal, operational and administrative functions.

In August, Burford announced that then-chief financial officer Elizabeth O’Connell would move to a new role after shareholders criticised the fact that she is married to chief executive Christopher Bogart.

She is now chief strategy officer and remains on the management committee, while her partner is being proposed to join the company board.

But Muddy Waters kept up the pressure on the firm, despite the lawsuit being dropped in the US.

Carson Block of Muddy Waters said: “None of what they have said today counters the fact that Burford Capital manipulates its performance metrics and abuses the latitude afforded it under fair value accounting.

“We would also caution anyone against interpreting the litigation dismissal as affirmation that there is no misleading conduct or wrong-doing at the company.”

Since joining the junior AIM market in 2009, Burford has grown from being worth £80 million to £3 billion. Shares were up 20.5p, or 3%, at 704.5p.

PA

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