Goldshield's legal fees force profit warning

Mounting lawyers' fees have triggered a profit warning from Goldshield, the Croydon-based drug manufacturer being sued by the Department of Health and investigated by the Serious Fraud Office.

In a statement, the group said it had experienced "higher than anticipated costs" and told analysts that the battle with the Government was proving particularly expensive. The department is demanding £28m in compensation from Goldshield and three other companies over allegations of price-fixing. The companies are accused of breaching competition law to inflate the price of warfarin, an anti-coagulant, to the NHS. Analysts were told the transfer of call centres to India and the launch of a new cable TV channel advertising Goldshield's mail-order vitamins have also proved more expensive.

The lawsuit follows the Government's decision to call in the SFO to investigate the price of warfarin. Goldshield's offices and the home of its chairman, Ajit Patel, were raided by the SFO in April. The group's shares have lost three-quarters of their value since then, and were off 15p to 120p yesterday. Goldshield denies that it acted to inflate the price of warfarin, and has vowed to fight the claim.