News International was forced to cancel its sharesave scheme and compensate staff after its shares became invalid. The media firm, which is the UK arm of News Corporation and publishes The Sun and The Times newspapers, discovered the problem after the parent company moved its shares from the Australian Stock Exchange to the New York Stock Exchange, following its reincorporation last November.
Janet Anderson, deputy director of corporate affairs at News International, said: "The scheme rules related to the shares, which were the Australian News Corp shares. Obviously we reincorporated to the United States so they became US shares. [But it’s Britain’s] Inland Revenue that won’t allow any change to the rules of a sharesave scheme so we couldn’t simply re-point the shares to the US shares because the Revenue wouldn’t allow us. The scheme became invalid so we had to cancel it and compensate everyone."
Although the amount compensated was undisclosed, some 60% of the UK’s 4,000 employees are estimated to have been involved in the sharesave plan, which allows staff to save a portion of their salary to buy shares in their company. The organisation has since set up a new sharesave plan that allows staff to buy the correct new shares.