Aim-listed IGas (Aim: IGAS)offers a way to invest in the UK fracking boom and it's a share we've followed for some time. Recently it's been caught up in a controversy over director share dealing, writes David Stevenson at The Fleet Street Letter.
In January, IGas said CEO Andrew Austin had bought 300,000 shares at 135.38p each. He funded this by taking out a loan and transferring up to 7.5 million shares as security. Austin is required to redeem the shares in three years, and the lender is prohibited from short-selling or voting during the period of the loan, said IGas.
That's not the simplest way for a director to buy shares, but it didn't seem to be a big problem. However, similar deals at other Aim firms including troubled reinsurer Quindell have led to suggestions in the press that all is not as it appears, and that Austin has sold 7.5 million shares via the back door.
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This hammered the IGas share price. IGas has now issued another statement, saying it has complied with Aim disclosure rules and that Austin still owns the 7.5 million shares. So what do we think now? IGas has been producing positive news recently, with drilling underway at its Ellesmere Port well. So while this development is unwelcome, selling now could still be a big mistake.
Verdict: take no action for now
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