Scottish & Southern

  morddwyd 04 Apr 13
Locked

SSE fined for misselling

http://www.bbc.co.uk/news/business-22011717

Like to think I did my bit towards this.

A couple of years ago I was in bed one afternoon when the door bell went.

Stuck my head out of the landing window and asked what it was about. Guy told me there was a problem with my power supply.

Got my dressing gown on and struggled downstairs slowly (we are both disabled and have a notice on the door saying so, we also have a ramp, and a wheelchair stored in the porch).

Chap said he was from Scottish Hydro (part of SSE) and their equipment had identified a problem with our power supplies.

I expressed surprise, and said that Scottish Hydro did not supply our power.

He said he knew that, and we were paying too much and they could supply it cheaper.

It was only then I caught on!

I was furious and declined his offer somewhat forcefully!

Complained to the company and received a very self justifying reply, so complained to Ofgem.

£10.5m? Add another zero.

  Forum Editor 06 Apr 13

spuds

The directors of a company make decisions about whether or not to pay dividends to shareholders. The government does not have powers to interfere in the conduct of a PLC, other than by legislation.

As for "most large shareholders are large commercial enterprises themselves, who main aim in life is making profit"

Well of course they're interested in making profits - they want to attract and keep their own shareholders. I would have though you would understand that.

Under the terms of the Companies Act 2006 all company directors have an over-arching duty to act in the way they consider, in good faith, would be most likely to promote the success of the company.

  spuds 06 Apr 13

FE

Thank you for the clarification.

But one little thing slightly concerns me. You have mentioned " they want to attract and keep their own shareholders. I would have though you would understand that".

In my lifetime I have held many shares in large companies (BT, BG, BA and many more beside) and also held shares in most of the once well known building societies, even the Automobile Association, when members were classed as shareholders. When I gave up those shares, never once did I receive a letter from any of them, asking why I had given up those shares. And never once did I(in my opinion) consider I counted for anything, because the large institutional investors outweighed and overpowered my minor and perhaps irrelevant shareholding stake.

  oresome 06 Apr 13

If SSE has transgressed, I've no problem with them being fined.

But remember that the shareholder is the one that finances SSE, pays for the infrastructure improvements and takes on board the risk. In return they receive a dividend.

The taxpayer through the government doesn't want to shoulder this cost directly, hence nationalised industries were sold off. If you don't want to accept the cost and associated risk yourself, there has to be an incentive for someone else to do so.

SSE has a yield of 5.7% which is better than a bank account, but allow for inflation and any tax liability and the real return is probably less than half that figure. Of course there's no guarantee you'll ever see your capital again or that the yield will be maintained or that the company won't ask you for more money when the latest infrastructure project overruns.

Anybody fancy a punt on SSE?

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