BT investors in watchdog protest

MARY FAGAN

Industrial Correspondent

Hundreds of small shareholders have written to the Government and BT complaining about the effect of tightening regulation on the company and the decline in the share price. A BT spokesman said many private investors felt that they were sold shares under false pretences and believe the company is suffering unnecessarily.

BT's share price has fallen to around pounds 3.45 from more than pounds 4.80 a few years ago. At the time of the sale of the third tranche of BT shares in July 1993 the share price was pounds 4.10.

Concern among investors is thought to have escalated following proposals late last year from the watchdog, Don Cruickshank, to take on "sweeping" new regulatory powers. City analysts havewarned that future pricing proposals from the regulator could prove extremely onerous for BT. The consensus is that relations between BT and Mr Cruickshank's office - Oftel - have become increasingly acrimonious and the company could soon find itself referred to the Monopolies and Mergers Commission if it refuses to accept Mr Cruickshank's demands.

In a letter last month to Michael Heseltine, Deputy Prime Minister, one investor said: "Don Cruickshank seems to be turning into a power- crazed megalomaniac seeking to promote his own media image."

Some sources say that BT is actively encouraging investors to complain. Oftel said that Mr Cruickshank would continue to carry out his duty as he thought fit.