UK share voting advisor avoids wind-up order over tax debt

Proxy firm reaches voluntary arrangement with creditors for repayment.

Manifest Information Services, the UK-based shareholder voting advisory firm, which counsels investors managing more than £3trn of shares, including some of Europe’s largest pension funds, has staved off a winding-up order from the UK tax authorities by agreeing a legal debt repayment arrangement with creditors.
Manifest had been put on a list of companies facing wind-up proceedings on May 25 in the UK’s Companies Court. The wind-up order was brought by HM Revenue and Customs (HMRC), the UK tax authorities, and was dismissed according to the court. Manifest reached agreement with creditors earlier this month to repay unpaid taxes and other debts amounting to £172,455 (€198,827), according to a filing at Companies House.
The filing says Manifest owed almost £161,000 in VAT (Value Added Tax) and PAYE (pay-as-you-earn) employee tax payments to HMRC. It says Manifest also owed a further £11,500 to Exchange Data International, a corporate actions data firm. These debts have now been paid, the company says. “Every creditor is getting paid,” said company accountant Phil Lawrence, speaking to RI.

According to abbreviated accounts filed in March 2010, Manifest had creditors to the tune of £386,309. Fixed assets were valued at just under £1m. This included a revaluation of its intellectual property from £141,079 to £750,000. The company had £25,052 in cash in the bank, up from just £564 in 2009. The meeting was held with creditor representatives on May 11, according to the Companies Housefiling, and Manifest’s request for a Company Voluntary Arrangement (CVA) was approved. A CVA is a procedure that allows a company with debt problems to reach a voluntary agreement with business creditors regarding repayment over an agreed period of time. Under the CVA, companies can continue to trade and carry on as normal once creditor issues have been resolved. Sarah Wilson, Manifest’s Chief Executive, told RI that the creditor meeting was part of a routine balance sheet restructuring related to the arrival on the shareholder register of William Claxton-Smith, former head of corporate governance at Insight Investment. Wilson is one of the UK’s most prominent voices on shareholder governance and corporate transparency and is regularly quoted in the media. She said: “It’s a technicality that’s gone away, the company’s fine.” The CVA arrangement does not allow the company’s directors to pay a dividend or any extra remuneration. According to the terms of the CVA, Manifest’s creditors said they could, however, “petition for a winding up order” to close the company if it breached the debt repayment arrangement. Manifest’s clients include many UK pension funds and investors as well as the giant Swedish government AP buffer schemes. Manifest is chaired by Michael Deakin, the former Chief Investment Officer at Insight Investment. It has a partnership with Sweden’s GES Investment Services and said in January that it was planning to enter the US market following the closure of its US partner, Proxy Governance International.