Connaught caught up in FSA probe over reporting speed
SHARES in housing repair firm Connaught remained in the doldrums yesterday as details of the reported Financial Services Authority investigations emerged.
The FSA is thought to be focusing on whether the beleaguered company was prompt enough in telling the stock market about its worrying financial state. Its profit warning on 25 June led to shares plummeting 93 per cent in the space of a month.
A spokesperson told City A.M. yesterday: “The company has not received notification of a formal investigation.” The FSA is believed to be have made informal enquiries.
Connaught’s Northern managing director is also believed to be under close FSA scrutiny for selling off £265,000 worth of shares just days before the profit warning. The FSA declined to comment.
The company remains in talks with lenders, led by Royal Bank of Scotland, to extend borrowing from its current overdraft limit of £200.6m.
Analysts yesterday questioned why the company issued positive management statements less than three weeks ago, claiming the board “fully expects to be able to operate within our existing covenant levels”.