The letter, written last week, notes that enquiries into the circumstances of the contracts have been made by other regulators, including the Department of Trade and Industry,"and that these enquiries might result in proceedings under the Criminal Justice Act".
Rudolfo Bogni, Swiss Bank Corporation's chief executive, said that he is unaware of a formal investigation by the DTI. "We have no knowledge of any potential criminal proceedings," he added.
The letter relates to attempts by Northern to appeal against prior clearance of the contracts by the panel and attempts to explain why the appeal cannot be heard at present. It says: "The Executive ruled that it would not be appropriate for the panel to hear the appeal until these enquiries [by other regulator] had been been completed and it was clear whether or not criminal proceedings would be pursued."
It adds that the evidence on which the panel would be required to base its decision would be the same evidence which might be used to determine whether an offense under the Criminal Justice Act had been committed.
The so-called "contracts for differences" between Trafalgar House and SBC - Trafalgar's advisor on the Northern Electric bid - allowed Trafalgar to benefit from movements in the share price of Northern and other regional electricity firms.
Separately, SBC's market-making arm bought shares in Northern Electric and Yorkshire Electricity and held them as market-makers - exempting SBC from disclosing the stakes.
Although the Takeover Panel had earlier cleared the situation surrounding the contracts for differences, Northern and its advisors had asked for the appeal on the grounds that the contracts for differences have resulted in a breach of rules 4 and 38 of the Takeover Code and a breach of the code's General Principle 6.
Rule 4 states that in the event of a bid, people other than the bidder who are privy to confidential price sensitive information must not be involved in dealing of any kind in the company being bid for.
Rule 38 says that market makers which are exempt from disclosure and which are connected with an offeror must not carry out any dealings with the purpose of assisting the offeror.
General Principle 6 states that all parties to an offer must endeavour to avoid the creation of a false market in the securities of an offeror or an offeree company.
According to the Takeover Panel rule 4 of the code is similar to provisions of the Criminal Justice Act 1993 related to insider dealing. It also believes that rule 38 and General Principle 6 would only have been breached if rule 4 had been broken.
The panel declined to comment on the situation. The DTI also said that it cannot confirm or deny whether any investigation is taking place. The Securities and Futures Authority said that it continues its enquiries, but could not add anything at this stage.
The Stock Exchange has also looked at the circumstances surrounding the bid.