Following publication of its interim results, the company put out a statement saying that It has always filed its statutory annual accounts on time in accordance with the requirements of the Companies Act 2006 (and before that, the Companies Act 1985), and at all times had sufficient profits and other distributable reserves to justify the payment of dividends.

The statement said: ‘However, the company has not satisfied certain procedural requirements of the Acts before paying certain of the dividends in the years since the company's IPO.'

‘These procedural requirements relate to the failure to file interim accounts at Companies House which justified the payment of interim dividends or the payment of final dividends before the circulation to members of the audited accounts of the company in respect of the relevant financial year.

‘The company has been advised that, as a consequence of the above distributions being made otherwise than in accordance with the Acts, it may have claims against past and present shareholders who were recipients of the relevant distributions and against those persons who were directors of the company at the time of the relevant distributions.’

In its statement, Hargreaves Lansdown says it wishes to put all potentially affected parties so far as possible in the position in which they were always intended to be had the relevant distributions been made in accordance with the procedural requirements of the Acts.

In order to do this, the company will hold a general meeting on 7 March, at which a resolution will be proposed giving the board authority to enter into deeds of release to discharge these parties from any obligation to repay any amount to the company in connection with the relevant distributions.

Hargreaves Lansdown notes that its decision to do this constitutes a related party transaction because Peter Hargreaves and Stephen Lansdown, who each hold more than 10% of the company's voting rights and are therefore deemed to be related parties under the listing rules, will be released from any liability to repay any amounts of the relevant distributions received by them, in the same manner as other shareholders.

In addition, the entry by the company into the directors' deed of release will also constitute a related party transaction with respect to the directors. Therefore, the resolution to be proposed will also seek the specific approval of the company’s shareholders for the entry into each of the shareholders’ deed of release and the directors’ deed of release as a related party transaction, in accordance with the requirements of the listing rules.