The Financial Conduct Authority has closed its investigation into car dealer group Lookers and not imposed any sanctions.
While the FCA expressed its ‘concerns’ relating to ‘historic culture, systems and controls’, it has advised Lookers it will be closing its investigation.
Lookers has released the £10.4m it had set aside for any potential fine from the FCA that may have resulted from the investigation.
The FCA was looking into Lookers for the ‘possible mis-selling of regulated products’ which could have been to the detriment of customers.
The investigation has been hanging over the dealer group’s head since July 2019 when the FCA launched its review into sales processes at the firm between January 2016 and June 2019.
Lookers chief executive officer Mark Raban said: ‘It is an important time for Lookers as we emerge from a difficult period dealing with both the challenges of our legacy issues and Covid.
‘We are pleased that the FCA has decided to close its investigation and we can now look forward and continue to build our business for the benefit of our customers and other stakeholders.’
Lookers has been busy getting its house in order this year. It revealed interim results in January and shares were finally relisted for trading on the Stock Market after a six-month hiatus.
Shares have bounced since they were relisting, doubling in price almost immediately and they were trading yesterday at 40.4p.
Mike Jones, compiler of the Car Dealer Top 100 list of most profitable dealers in the UK and executive chairman of ASE Global, said Lookers would be very pleased to see the back of the investigation.
He said: ‘Lookers will clearly be delighted that the FCA have decided to close their investigation into historic mis-selling of products, especially as it comes with no fine being levied.
‘The provision of £10.4m made last year can now be released and the company can continue on its road to recovery moving on from the “historic culture, systems and controls”.’
In January, Lookers revealed a £36.1m loss for the first half of 2020, but said things improved in the second half of the year.
At the time, analyst Mike Allen, of Zeus Capital, said he hoped the ‘legacy issues were behind them’ and that the group can ‘finally look forward’.
While analysts Peel Hunt said in a briefing to investors that it thought Lookers was now ‘well placed for recovery’ after ‘significant operational improvements’.
First published: March 2, 07:19; Updated: 07:28 with timeline
Lookers timeline: What’s happened when?
January 29, 2021 – Lookers revealed it lost £36.1m in the first half of 2020. The interim results led to shares being relisted on London Stock Exchange. They immediately rose 77 per cent.
January 6, 2021 – Lookers appoints Anna Bielby as interim chief financial officer, but there was no news on the delayed interim results.
December 29, 2020 – A third of shareholders vote against Lookers directors’ remuneration packages – including CEO Mark Raban’s £450k salary – at a general meeting.
December 18, 2020 – Lookers tells investors that its interim results, promised to be delivered before the end of the year, will now not be published.
December 9, 2020 – Lookers reveals interim CFO Jim Perrie has quit early and says it is ‘unlikely’ the interim results will be out before the end of the year.
November 25, 2020 – Lookers finally releases its annual accounts for 2019 showing a statutory loss for 2019 of £45.5m. Promises interim results in December and the hopeful reinstatement of shares on Stock Market.
October 31, 2020 – Long-standing Lookers non-executive director Tony Bramall, one of the group’s major investors, brings forward the date he will leave the board to the end of December. No reason is given for his early departure.
October 19, 2020 – Lookers updates market on performance in Q3, but still no word on its 2019 accounts or the FCA investigation. Analysts expect results to be out before December.
August 20, 2020 – Accounts delayed for fourth time and no promise given as to when they’ll be published.
June 9, 2020 – Lookers says it will suspend shares on July 1. Delays accounts for third time and says they’ll be published ‘no later than the end of August 2020’.
June 5, 2020 – Lookers says it will axe 12 dealerships and cut 1,500 jobs.
May 2020 – Pendragon CEO Bill Berman admits he wrote to Lookers to discuss a merger and updates Stock Market to that effect. Move described as ‘two drunk men bumping into each other in a bar’.
April 2020 – Fraud investigation deepens. £4m charge revealed and firm says there could be more. Delays accounts to June.
March 12, 2020 – New chief operating officer Cameron Wade leaves role after only a month in post.
March 11, 2020 – Lookers delays results, saying that in final stages of preparation ‘potentially fraudulent transactions’ in one division were discovered. Promises results in April.
November 2019 – Chief executive Andy Bruce and chief operating officer Nigel McMinn leave firm abruptly.
June 2019 – FCA launches review into sales processes at Lookers between January 2016 and June 2019. Lookers cannot ‘estimate what effect, if any, the outcome of the investigation may have’.
December 2018 – Lookers launches independent internal audit into sales process. It eventually finds ‘control issues’ in sales process where ‘improvements’ are needed. Findings handed to FCA.