QinetiQ stock dealings make some trigger happy

From Julia Finch Friday February 16, 2007 The Guardian

Why are we not surprised at QinetiQ boss Graham Love's rush to sell a large wodge of his shares at the earliest possible opportunity?

QinetiQ, for those with short memories, is the defence technology group privatised by the government last year in a controversial move that generated paper fortunes worth more than £20m for the group's chairman and chief executive, Sir John Chisholm and Love.

Yesterday Love and Andrew Sleigh, managing director of the business, leapt at the chance to turn their shares into real money - about £6m and £1.8n respectively. They acted just days after the first phase of a lock-in agreement came to an end. The three-phase lock-in allows directors to sell about a third of their shares after 12, 24 and 36 months. Love chose to flog 27% of his holding ASAP.

His dealings came days after the US private equity group Carlyle cashed in its last chips in QinetiQ. The sale ended a highly lucrative and controversial investment for the Americans. They acquired 31% of QinetiQ from the UK government for £42m in 2003. They then raised some £160m selling part of their stake at flotation and a week ago sold the rest, raising £140m.

Carlyle, whose image was so battered by Michael Moore's Fahrenheit 9/11 and whose directors once included the former president Bush and ex-prime minister John Major, is now out of the picture and evidently attempting an image makeover.

For shareholders who rushed to buy QinetiQ at the float, it has not been an impressive year. The shares, floated at 200p, were standing at 206p last night. And the company, which recently installed the former CIA boss George Tenet on its board, remains contentious.

Only last month the government, - QinetiQ's biggest shareholder with a 19% stake - was involved in a row after making consortiums led by the company preferred bidders on a £16bn private finance initiative contract for the MoD.

Why does the defence business always seem so tawdry?