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On Thursday, the Investment Association of Britain said that the raising of cash of TalkTalk from investors through a placing was considered as “a blatant disregard of the industry-accepted standards.”
The Investment Association is a trade body in the United Kingdom that represents the investment managers in the United Kingdom.
Talk Talk, a broadband provider, said that it would raise a maximum of 200 million pounds in a placing to help in funding a plan to connect around three million British businesses and homes with ultrafast broadband and keep their services competitive with larger rivals.
The Investment Association said that the placing of the company of its shares that are representing 19.99 percent of the existing share capital of the company on a non-pre-emptive basis neglected shareholder rights.
in a statement, a spokesperson for the Investment Association stated: “Pre-emption rights are a vital shareholder protection, and their misuse poses a serious threat to shareholder and investors’ interests – the UK’s pensioners and savers.”
TalkTalk is yet to be reached for a comment regarding the matter.
The company also reduced its forecast for its full-year earnings on Thursday and said that it would reduce its dividend to help in funding the new network and rebuild the customer base of the firm.