BMW staff investigated for Rover 'insider deal'

Click to follow
The Independent Online

Staff at the German car maker BMW are under investigation for insider trading over the sale of Rover.

Staff at the German car maker BMW are under investigation for insider trading over the sale of Rover.

The Frankfurt-based Stock Trading Commission confirmed yesterday that it had opened an inquiry into allegations that individuals had benefited illegally from the sale earlier this year.

British trade unionists were furious at the news, claiming that the revelations would further worsen the company's reputation in the UK.

The Tory party called on Stephen Byers, the Secretary of State for Trade and Industry, to reveal whether he was aware of the German stock exchange investigation.

Nearly 30 people at BMW are under investigation, including members of the management and supervisory boards and press relations department, according to reports in Germany.

Regina Noessner, spokeswoman for the commission, said that it was looking into insider trading, but would not say on what its suspicions were based.

"The investigation is still at an early stage, and routine for a company for which we have reasons to investigate," she said, adding that the investigation could go on for weeks.

It is understood that the commission was concerned about radical share price movements ahead of the company's Rover sale on 16 March.

News of the plan was leaked from company insiders on 14 March, causing the stock to soar. BMW then announced plans to sell its Rover passenger car unit to the British investment group Alchemy Partners Ltd. The Alchemy deal fell through and Rover was eventually sold to the Phoenix consortium in May for a symbolic £10, although its debts were also picked up.

Yesterday, BMW refused to comment on allegations of insider trading. "This is just a routine investigation that is undertaken any time there are big swings in a company's stock," said Juerg Dinner, a BMW spokesman.

BMW Group has improved its performance since the sale and it announced last month that its net profit was £198m this year, up from £118m in the six months to June.

John Edmonds, the general secretary of the GMB union, said that he was shocked by the news coming out of Germany. "It beggars belief that anyone may have been seeking to profit illegally from the sale of Rover when at the same time thousands of Rover workers and their families were fearful for their livelihoods," he said.

Alan Duncan, the Conservative trade and industry spokesman, said: "Yet again, we have reports from Germany affecting the British car industry, and yet again the DTI are the last to know what is going on.

"What we need now is an urgent statement from Mr Byers on whether he was aware of the investigation and if so when he was considering telling us about it. If not, we will be forced to the conclusion that yet again Mr Byers is asleep at the wheel."

The British Government refused to comment on the investigation. "It's a matter for the German authorities," a spokesman for the Department of Trade and Industry said.

Comments