Advertising watchdog to reprimand MKM

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The Independent Online

MKM Group, the promotions company which floated on AIM last summer, will be severely criticised today by the Advertising Standards Authority over a string of bungled offers.

MKM Group, the promotions company which floated on AIM last summer, will be severely criticised today by the Advertising Standards Authority over a string of bungled offers.

The ASA is upholding 101 complaints against the company over a "cruises for £10" deal where hundreds of readers have still not received the holiday they expected. The watchdog is also investigating two "city break" promotions run by MKM.

The company said in January that problems meeting demand for the Daily Express cruises offer would send it into the red this year, but that it could not yet quantify the extent of the losses.

Last night the company was planning a trading update which is expected to say the financial position is still unclear, but that it is still winning new business.

The ASA judgement says the authority "noted it had recently upheld complaints about two other promotions administered by MKM and two other investigations were ongoing. It was concerned that the same administration difficulties and problems with meeting demand were regularly occurring in promotions administered by MKM and noted the steps MKM had taken to avoid a repetition of the problems the cruise promotion had faced."

MKM's shares have lost three-quarters of their value since their flotation at 44p. The company raised £1.4m for expansion and its founders - the brothers Mark and Victor Koch - cashed in £1m of shares. MKM was briefly owned by the British Airways subsidiary AirMiles.

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