A controversial Birmingham stock exchange which has swallowed £3 million of public cash was sold for just £1 following the demise of Advantage West Midlands, it can be revealed.
The bargain basement sum paid by the new owners of Investbx, which include the exchange’s former chief executive, was agreed as part of a sale deal struck by the scrapped regional development agency.
Investbx was set up in 2007 to much fanfare as an innovative way to help West Midlands firms access investment – but it has been regarded as a flop in some quarters as just three firms have “floated” since its launch.
Despite being loss-making in its current state, the stock exchange looks set to have a rosier future.
The idea of reviving Investbx is part of a strategy led by Birmingham City Council and the new local enterprise partnership to support business growth in the region.
Eyebrows were raised after it was sold in a private capacity to its former chief executive Sue Summers, who now also works for Birmingham City Council running a new department called Finance Birmingham, which provides funding for local firms.
Birmingham City Council has said it wants to use the exchange in the future as part of plans to set up its own £10 million equity investment fund.
The council plans to take stakes in local companies and use the stock exchange as an exit to its investments by selling its stakes to other investors through the platform.
Ms Summers bought the stock exchange with fellow Investbx board member John Handley through a new company called Colmore Row Managed Services.
AWM initially refused to release the sale price agreed with Colmore Row Managed Services, saying it was “commercially sensitive”.
But using freedom of information legislation, the Birmingham Post successfully argued the sum paid by Colmore Row Managed Services was in the public interest, forcing AWM to release the price paid.
AWM said the sale took place after a marketing process which established the sum of £1 as the open market value of Investbx.
It said the token sum was justified as the exchange was loss-making and had to be subsidised by the agency with a grant worth £3 million since 2007.