Aim advisers review causes market jitters

A stock Exchange review of its nominated advisers for the Alternative Investment Market (Aim) is causing investor jitters, but it is unlikely to affect long-term confidence in the market, say city analysts and lawyers.

Last week restaurant group Greenhills was suspended when its nominated adviser, Neill Clerk Capital, (an Aim-listed company hived off from Scottish law firm Neill Clerk in 1994) resigned, saying that the company had not disclosed some information.

Two weeks earlier, multimedia company Firecrest was suspended when its nominated adviser Singer & Friedlander resigned.

To list on Aim companies need to have a nominated adviser chosen from a Stock Exchange list of 60 to carry out due diligence checks. If a company loses its adviser the Stock Exchange suspends trading in that company.

Both Neill Clerk and Singer remain as advisers for dozens of other companies on Aim and Ross Macdonald, chief executive of Neill Clerk Capital, denied that the reason it dropped Greenhills had anything to do with the Stock Exchange's review.

So far none of the 60 advisers has come off the list, but Tim Steadman, a partner in the smaller companies group at Herbert Smith, said he expected one or two would leave following the review. Quality of nominated advisers varied, he said. “If some of them came to us with a company, we would think twice before we took up the instruction.”

One analyst said: “Nominated advisers have come under pressure because of the annual review of advisers by the Stock Exchange. Some may jump before they are pushed.”

Paul Cooper, corporate finance partner at Bristol firm Bevan Ashford, said: “This is a sign that the market is maturing. What has happened is that all the advisers reviewed their position after the first year and some feel that they do not wish to keep on with what are quite onerous requirements.”

He said advisers were becoming more selective about who they represented and were refusing to take on small firms with no prospects of profits.

There were 207 companies on Aim at the end of August, up from 190 a month earlier.