Shares in financial services company IFG Group slumped over 16% at one stage today after it said that legacy issues in its main UK operations could cost it over £20m.
In a trading update today, IFG said the legacy issues were overshadowing the company's strong fundamentals, good growth and improving underlying financial performance.
The company's chief executive John Cotter said IFG wants to bring closure to the issues as soon as possible and will provide further updates as matters develop.
IFG offers financial solutions through its UK-based units James Hay Partnership and Saunderson House.
It said today that it is incurring "material legal and remediation costs" linked to the UK revenue's investigation into Elysian Fuels.
It has also received a legacy claim relating to a legal claim in Jersey, but said the total amount of the legal claim of up to £3m has now been reduced to £2m.
It said it was seeking legal advice on whether the indemnity is valid and the extent, if any, to which the company is liable.
It said this depends upon the extent to which they crystallise or are determined, which could lead to materially reduced statutory accounting results for 2017 for the group.
"In light of the inherent uncertainty, the board has taken the prudent decision that no final dividend will be be paid in respect of 2017", the company stated.
Today's trading statement also said that IFG's James Hay business added 6,000 new clients last year, an increase of 30% compared to 2016. It now has £25.5 billion of assets under administration.
Meanwhile, Saunderson House gained 247 new clients compared to 215 in 2016 and it now advises on £5.1 billion of clients' assets.
IFG said that despite Saunderson's House growth, the company's board has concluded that greater value for shareholders may be created by a sale of the business.
IFG said that it had received a number of approaches for the business, adding that discussions are at a preliminary stage.
"The ggroup will consider a sale if appropriate value for shareholders can be achieved. There can, however, be no certainty that a transaction will complete," it added.
Shares in the company were sharply lower in Dublin trade today.
