Frasers Group calls for increased regulation following SRG acquisition
In an announcement on the London Stock Exchange, Frasers shared its discontent with the current regulation. The company said it believes the regulations to be "unfit for purpose" as it allows "unaccountable" mistakes to be made and businesses to fall into administration "entirely without sanction or censure of those involved".
It explained that in all its decisions it was acting to protect shareholder value.
Frasers said it should be the priority of government to fully investigate the collapse of all listed businesses, and to impose financial or criminal penalties for individuals found to be complicit in the downfall of a business. It added that sufficient resources should also be made available to the relevant authorities to police and deter other businesses.
Frasers added that Studio Retail Group's fall into administration followed a similar pattern to the demise of companies Debenhams and Goals, and said it sees these not as "isolated incidents but rather as manifestations of systematic governance failures and a lack of corporate and individual accountability."
The £25 million loan that SRG asked for was further not going to be enough to keep the business afloat, Frasers said, and proved to be a "gross underestimation of the scale of the issues facing the business."
Frasers further claimed that SRG had "buried its head in the sand" while the world changed, and that at best the business was not adequately scrutinised by the board, or at worst the business "deliberately concealed" its demise.