The multi-million-pound business run by a key donor to Vote Leave – the group campaigning for Britain to leave the EU – has warned potential investors that its profits and ability to move workers and capital around the world could suffer from a British exit from the European Union.
A series of warnings about a possible “Brexit” are contained in a prospectus for sale issued by the financial trading business CMC Markets, founded and still run by the leading Eurosceptic businessman Peter Cruddas. The document, to which all directors of the company – including Cruddas – signed up last month, will be a severe embarrassment to the beleaguered Vote Leave operation.
The fact that Cruddas, who is also co-treasurer of Vote Leave, is associated in the documents with the very arguments made by campaigners for staying in the EU is the latest problem to beset the various “Out” campaigns after weeks of division over strategy and personal fall-outs. Cruddas donated £1m to Vote Leave last year. CMC Markets employs more than 500 people and had revenue of more than £150m last year.
In a section of its Initial Prospectus for Sale, the document announces that “a UK exit from the EU could impact the group’s profits”. It goes on to say that a Brexit could lead to burdensome changes of regulations and restrictions on how the company could move money and staff around the world.
The document says: “Following the UK general election in May 2015, the UK government has committed to hold a referendum by the end of 2017 on whether the UK will remain in the EU, and the group faces risks associated with a vote to exit the EU.
“For example, because a significant proportion of the regulatory regime applicable to the group in the UK and anticipated regulatory reform is derived from EU directives and regulations, a vote in favour of the UK exiting the EU could materially change the regulatory framework applicable to the group’s operations.”
It also said the group could be required to become reauthorised in multiple European jurisdictions. In addition, a UK exit could result in restrictions on the movement of capital and the mobility of personnel. Any of these risks could result in higher operating costs and have a material adverse effect on the group’s business, prospects, financial condition and results of operations.”
The prospectus makes clear that the directors, including Cruddas, accept responsibility for its statements. Cruddas, it says, “is responsible for running the group on a day-to-day basis”. Together with his wife, Fiona, Cruddas has been involved in the sale of £167m worth of shares.
James McGrory, chief campaign spokesman for Britain Stronger in Europe, said: “Vote Leave likes to pretend leaving the EU wouldn’t hurt businesses, but the company owned by the man bankrolling them does not seem to agree. This large employer could not be clearer – leaving risks damaging the business as so much of their market is in Europe.”
In 2015 CMC Markets announced a 61% increase in underlying profit before tax to £51.9m for the financial year ended 31 March. It also extended into eastern Europe with the launch of a Warsaw office, bringing the total number of offices up to 14.
A spokesman for Vote Leave said any prospectus for sale had to look at the “downside potential” risks to a company and added that there was a legal requirement to look at the worst-case scenarios.
Asked if Vote Leave or Cruddas held the view that there were serious downside risks for a big company from leaving the EU, he added: “Vote Leave believe British businesses will thrive outside the EU. That is also Peter Cruddas’s view.”
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