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British Energy suspended over price confusion

Trading in British Energy shares was halted for more than two hours yesterday as confusion surrounded whether dealers should quote the price including the second privatisation instalment. In what the Stock Exchange said was a very rare event, the nuclear generator's shares were suspended at 8.44am and did not reappear on dealing screens until after 11am.

Separately yesterday it emerged that the company did not expect to find a new chief executive until the end of this year to fill the post left after the surprise resignation in June of Robert Hawley. The departure came after the board told Mr Hawley he would not succeed John Robb as chairman when his contract expired in 1999.

The company said it had not found a candidate for the joband, until searches proved successful, Mr Robb would act as executive chairman.

The trading glitch yesterday came when some market-makers, who match buyers with sellers, were apparently unaware that the company's share price had to be quoted as fully paid from yesterday, including the second instalment of 98p a share. The shares had opened more than 44 per cent higher than Friday's 208.5p close, at 301p, to reflect the fully paid price.

British Energy shares were offered to investors at 203p in July 1996, in a controversial privatisation which raised pounds 1.4bn for the Treasury. Small shareholders were given a 5p discount, with the cash payable in two instalments, the first of 100p, with the balance of 98p due on 16 September.

The Stock Exchange said it had told dealers of the impending change in July, with a follow-up announcement on its newswire service. A spokesman said the Exchange could not explain why some market-makers were yesterday morning still quoting partly paid prices.

The share price had to be quoted as fully paid from yesterday because for technical reasons investors who sold their shares before 16 September would still need to pay the second instalment. Until last Friday shareholders could sell the stock and pass responsibility for the second payment to the buyer.

The Stock Exchange spokesman insisted nobody was to blame for the confusion and added that only seven trades had apparently been made before the suspension.

British Energy said the mess was "obviously to do with administration at the Stock Exchange". The shares closed at 309p, equivalent to a rise of 2.5p on a like-for-like basis.