Dotcom investors fight for £2.6m

12 April 2012

INVESTORS in a failed dotcom investment company are going to court to fight for the return of millions of pounds paid in dividends to its founders.

They are challenging a 99-for-one bonus issue made in December 1999, claiming that European Internet Capital's founders were not entitled to bonus shares because they had not paid for their original shares.

The firm was set up by Julian Bryson, Simon Reid and James Spickernell, son-in-law of the late Marquess of Lansdowne. From an initial investment of £734, the three have made a huge profit, including a £2.6 million share of the £6.5 million dividend in dispute.

The angry investors claim the three were not entitled to most of that dividend, which was supposed to return to shareholders what was left of £24 million initially raised by the company for investment.

Early backers included the Countess of Leicester, the Marquess and Marchioness of Lansdowne and the Queen's stockbroker Cazenove.

A business plan promised to make investments in the 'European B2B internet space', dotcoms specialising in business-to-business deals on the World Wide Web.

EIC raised the £24 million, but Cazenove failed to secure the £50 million that EIC said it needed to list on the Alternative Investment Market. A flotation was abandoned and Spickernell quit. Now EIC has only a handful of stakes in dotcoms, some of them defunct, and is little more than a shell with £1 million cash.

The plan to share that money is now being challenged in the High Court. If successful, the proportion that is earmarked for the founders because of their disputed bonus shares will be slashed.

They could also be forced to pay the other EIC shareholders most of their windfall from the £6.5 million dividend.

An investor said: 'There is a lot of support for this action. Big institutions like Cazenove would rather write the money off and forget it, but we don't have that luxury.'

Meanwhile, the founders are trying to call an extraordinary general meeting to depose the two current directors.

Spickernell told Financial Mail that only a tiny number of investors were dissatisfied. 'They knew the capital structure when they invested,' he insisted. 'This court case is a manoeuvre to increase their returns.'

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