MMI Stockbrokers will reopen for business next Monday following the completion of the take-over of the troubled stockbroking firm by the British securities house K&H Options. MMI managing director Mr Tim Murphy, who lead the search for a rescuer for the company, will be remaining on as managing director.
K&H is owned by Mr Bob Holt and Mr Phil Kitchener, who have been trading in London for the past 30 years. Mr Holt will become chairman of MMI. Former MMI directors, Mr Paul Boucher and Mr John Curran, were invited to become involved in the new company but declined so as to concentrate on the MMI money broking and foreign exchanges business.
The money-broking and forex business was not affected by the cash flow problems that forced the crisis at MMI Stockbrokers. A spokesman for MMI said that the firm, under its new owners, will continue to try and recoup money owed to it from clients who availed of the controversial rollover arrangement, which allowed them to postpone payment for Dana Petroleum shares that MMI had purchased on their behalf.
This left MMI holding large volumes of stock which had been bought for more than 20p but which later fell to 8p. Many of these clients then simply refused to pay their bills, and when a number of London market-makers withdrew their support for the rollovers, MMI was left holding Dana shares worth a fraction of their value in the market.
The cash shortfall at MMI is estimated at up to £2 million, but the company spokesman was unable to say how much of the outstanding debts has been recouped.
Ernst & Young, who carried out the due diligence for K&H, have been appointed auditors and financial advisers to MMI Stockbrokers. The previous auditors were Dunne Saunders & O'Reilly.
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