Quindell spends £11M bid to bolster its own share price

The LSE-listed insurance claims processor Quindell Plc is investing heavily to jack up its own share price. It's estimated that the company has pumped in £11million so far to push up the share price on London Stock Exchange (LSE).

The company has been intervening in the market to prevent steep fall of the share price, which has been tumbling for the past two years. Quindell has given options to employees allowing them to buy shares at a discounted price. Quindell share price was 104.5pence last weekend.

Quindell has bought scores of staff out of share rewards scheme that otherwise would have sent its share price dropping. The company has recently announced that it would buy the staff out of the scheme. It opted for giving the staff money they would have made selling their shares. Incentives are part of the company share schemes.

Generally, employees, who have been given share allotments, have options of exercising selling right after a certain period of time.

Quindell would have allowed current and former employees to claim ownership of 22million shares at a hefty discount. The selling of 22mn shares would have hammered down the company's share price. During the past two years, the share price dropped to just over 30pense from 615p.

Rob Terry, Quindell's Founder and ex-Chairman was fired for hard selling. Terry is facing Fraud Office investigation. Terry left the office in last November over charges of taking share in opaque share buying arrangement.

This is the second time Terry was forced to resign. Previously, he quit the outsourcing company innovation Group in 20013. Terry's latest involvement is a technology investment firm Quob Park Estate, a shareholder in broker Daniel Stewart.

With the ongoing investigation, Quindell couldn't publish its quarterly results. The revenues were gradually dropping over the year. Quindell's revenues were at peak of over £150million in 2012 and then eased to over £50mn in 2013 and marginally recovered to about £70mn.

Despite the marginal rise of 18 percent in revenues, the net income fell 451.37 percent to £371.92mn from 67.45mn. The revenues rose to £72.02mn from £61.03mn. The return on assets was negative 24.22 percent while return on equity was 30.51 percent. The return on investment (RoI) was again negative 29.81 percent.

The options exercised by employees would benefit them if better performance of the company pushes share price upwards. The cash reserves of Quindell in 2014 fell by £129.47 million.