Plastic group under LSE scrutiny
Friday 18 June 2004
The London Stock Exchange was looking into the affairs of the plastics company 3DM yesterday, amid allegations of misleading investors and deepening confusion over the status of its most eagerly anticipated new product.
The retail investor favourite is at the centre of a vicious raid by short-sellers, who have passed information on the company to the LSE, which regulates the AIM where 3DM shares are traded.
They claim a major shareholder - Battlebridge, a Jersey-based company owned by a friend of 3DM's chairman, Ken Brooks - has sold shares without the market being informed. The company denies this and says it is mischief-making by the raiders who include the notorious short-seller Simon Cawkwell, known in the City as Evel Knievel.
Grant Thornton, 3DM's adviser, said last night it was looking at this and other claims that the company misled the market.
The developments came as 3DM shares plunged 20 per cent to 62.5p. They have halved in value since the start of June.
There was confusion, too, over the status of the most eagerly anticipated new product - a "bed", or base, for the back of a DaimlerChrysler truck, made of a plastic as strong as steel. The company's US development partner said work on parts for a DaimlerChrysler truck has been suspended until the autumn and could be delayed for months - just days after 3DM's annual results struck a bullish note.
Mario DiNello, head of 3DM's US manufacturing partner, Global Tech International, said he was waiting for DaimlerChrysler to supply the blueprint for the 2005 model by September before proceeding to ramp-up production. Asked how many beds could be produced this year, Mr DiNello said: "If we have to make a new mould, that is going to take time, and that could push the timeframe back a bit. If there is no model change, we can accelerate immediately."
Mr Brooks said production could be ramped up anyway using the existing mould. He stood by Monday's results statement promising accelerated production by the end of 2004, adding that sales of "5,000 by Christmas" were possible. Mr DiNello yesterday said "more than a dozen" beds had been produced, while Mr Brooks said "less than 100" existed.
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