Conclusion

The only reasonable conclusion, in our view, is that the actions by the Directors outlined in this evidence section were all part of a carefully orchestrated plan to defraud shareholders of their investments - a plan given the cloak of respectability due to the high incidence of ‘pre-pack administrations’ in recent years that occur when a business’s trading fortunes decline over an extended period of time.

In the case of Yell/hibu, however, the ‘transformation’ of a profitable company with forecasts of a rosy future (in May 2012), to one whose shares were being portrayed as having ‘little or no value’ took a period of just three months.

7800 individual shareholders lost the entire value of their investments, pension funds lost many millions of pounds, and we know of a number of examples where the ‘transformation’ effected by Bob Wigley, Mike Pocock, Tony Bates and the rest of the hibu Board of Directors did quite literally ‘transform’ people’s lives - with devastating consequences.

hSG is convinced that shareholders and their families have been the innocent victims of a very serious and premeditated fraud, while the Board of Directors and their associates have made significant sums of money - enabling the new owners (a number of ‘vulture funds’ specialising in the purchase of distressed debt) also to profit to the tune of hundreds of millions of pounds.

Yell Group plc was not a high risk start-up. It was a former FTSE 100 company in its fifth decade of trading.  According to its annual report, issued at the same time the ‘restructuring’ talks commenced with its Lenders - “The Group is also cash generative and profitable (before exceptional items)”, and it was making £269 million annual profit after tax.

It was a company that was meeting its debt repayment requirements and had already bought back over £2 billion of debt (50% of its peak figure) in the previous 3 years; and it was capable of continuing to meet its existing requirements while buying back the bulk of the remaining debt at advantageous market rates. 

There is little doubt that this is a serious and complex FRAUD which has the potential to be easily replicated, and that it will tarnish the image of UK as a safe place in which to do business if the perpetrators are allowed to get away with the proceeds of their wrongdoing.