M&S share dealing under investigation

Share dealing in Marks and Spencer is being investigated by the City watchdog, it was announced today.

The Financial Services Authority (FSA), the City of London’s main regulator, has launched a formal investigation into trading in the store’s shares.

The shop’s new chief executive, Stuart Rose, bought shares in the firm shortly before a proposed takeover bid sent the value soaring.

The FSA is looking into unusual share trading in the months running up to May 27, when billionaire entrepreneur Philip Green announced plans for an £8bn-plus (€12bn) bid for the retailer.

Mr Rose bought the shares on May 7, after receiving a telephone call from Philip Green, who asked him to come to a meeting on May 12.

Mr Rose said Mr Green did not tell him what the meeting was about or that he was planning a takeover bid during the telephone call.

The regulator said last month it was undertaking a preliminary review of trading patterns, but has now gone a step further by launching an investigation through its enforcement division.

A spokesman said today: “Following these initial inquiries we have referred the matter for investigation to the enforcement division.”

This means its initial inquiries indicate that it has seen sufficient evidence of questionable activity to merit using its full powers, which are in some cases greater than those of the police.

They include the ability to interview witnesses under caution and force them to hand over documentary evidence.

Firms have been fined tens of thousands of pounds in the past for ‘market abuse’.

The FSA said this includes using inside information unknown to the market. This could include buying shares in a company in advance with inside knowledge of a forthcoming takeover.

Stuart Rose, the new M&S chief executive, was a former ally of Mr Green, who is bidding to take over the company.

Mr Rose bought 100,000 shares at just over 276p-a-share on May 7 – the day he received a call from Mr Green inviting him to a meeting at which they discussed Mr Green’s plans.

Mr Rose has said he knew nothing of Mr Green’s intentions until the meeting, on May 12.

The value of each share has since gone up to 362p.

A number of people connected with Mr Green have made well-timed investments in recent weeks, the Financial Times said.

A spokeswoman for M&S said: “We are happy to co-operate with any inquiry. Stuart has done nothing wrong.

“He did not know anything about Philip Green’s intentions when he bought the shares.”