23/07/2011 - Tamara Cohen
It wasn?t the most sensitive way to announce the end of a 21-year marriage.
But yesterday Sainsbury?s boss Justin King was forced to broadcast his? divorce to the Stock Exchange with the? transfer of ?2million of shares to his ex-wife Claire.
He said in a statement: ?Justin King no longer holds a beneficial interest in the shares held by Claire King.?
The 50-year-old has had a successful seven years at the helm of Sainsbury?s, transforming the once-troubled? brand into Britain?s fastest-growing supermarket.
He has handed over 700,000 shares ? worth around ?2.1million ? to Mrs King, which is more than half of his personal holding in the company.
Divorce lawyer Vanessa Lloyd Platt said share transfers were becoming an increasingly common way of divorcing during the recession.
?We are seeing more and more of this ? where spouses are getting shares instead of assets such as a home or yacht,?? she said.
?That means that not only are they taking on the risk of the shares, but they are essentially being brought into the boardroom as huge shareholders in the company.?
Mr King and his wife shared a secluded mansion near Leamington Spa, Warwickshire. Yesterday a woman who answered the door said she had? no comment.
Mr King was criticised in 2008 for taking a ?9million bonus as struggling families, hit by the financial crisis, were grappling with increasing food prices.
He is one of the highest-profile company directors dealing with divorce by handing over shares.
Miss Lloyd Platt said there were risks attached to the practice.
?You have to be extremely careful to reassure investors as dumping lots of shares can send the wrong message to the markets,? she said.
?In the past husbands or wives with shares would ask the bank for a loan against their value, but in the recession banks are refusing to do that, so you have to sell or transfer the shares.
?Wives are entitled to a 50-50 settlement and without access to capital it?s all much more complicated. They won?t mind if the shares look secure but if they look volatile it is a problem.?
The party which takes on the shares takes on the risk attached and has no legal protection if they plummet in value.
In 2004 Stephen Marks, the millionaire behind clothing giant French Connection, sold ?40million worth of shares to finance his divorce from wife Ailsa.
The sale effectively ended Mr Marks?s control of the company he started.
Follow the link to view this article on the Daily Mail site: http://www.dailymail.co.uk/news/article-2017887/Sainsburys-boss-revealed-marriage-split-stock-exchange.html#ixzz1TPIkz04F
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