SFO set to probe failed bid

The Serious Fraud Office is set to launch an investigation next week into the events surrounding the failed bid approach by Galileo, a vehicle set up by Andrew Regan and a consortium of investors, for the Co-operative Wholesale Society (CWS).

The CWS has provided a dossier of information to the SFO on the affair, saying that it has not received adequate answers from Mr Regan, his business associates and advisers on a number of issues, and inviting the SFO to investigate further.

The matters raised are thought to include the pounds 2.4m payment by Hobson, another of Mr Regan's vehicles, to a Cayman Islands company controlled by Ronald Zimet, the non-executive chairman of Freepages. The CWS says the payment has not been adequately explained, despite several written requests for clarification from Mr Regan during the past week.

A spokeswoman for the SFO said that there was no investigation currently underway and she could not comment further. But sources familiar with the SFO's workings said that an investigation could commence when the director deemed it appropriate and that no decision had yet been made.

On Friday, the Stock Exchange confirmed that it was examining evidence presented to it by the CWS concerning share purchases in Lanica by the shareholders in Galileo in the months leading up to the suspension of Lanica's share price in February after it had reached pounds 19.50, a tenfold rise in a year.

"We are discussing a number of issues with the company, and until we are happy the shares will not be relisted," said a spokesman for the Stock Exchange.

The Galileo bid finally collapsed on Friday, after a High Court judge upheld an injunction preventing the use of stolen confidential information after what the judge described as "iniquitous conduct" on the part of the bidders.

The CWS has reiterated its intent to take legal action against Mr Regan, Galileo chief executive David Lyons, and Galileo advisers Hambros and Travers Smith Braithwaite, as well as the suspended CWS employees Allan Green and David Chambers.