Warburg's pounds 300,000 gifts settle SBC rift

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The Independent Online
SG WARBURG has agreed to pay about pounds 300,000 to charity to settle a dispute with Swiss Bank Corporation over its controversial market raid for shares in the oil company Lasmo.

The Stock Exchange, which had investigated Warburg's role in the affair, is to review rules governing the placing of share orders during takeover battles.

Warburg, which advised Enterprise Oil during its failed bid for Lasmo, led a raid for 10 per cent of its target. But Swiss Bank claimed it was unfairly prevented from selling its Lasmo shares because Warburg favoured institutions supporting the bid.

Swiss Bank was thought to be claiming about pounds 1m in compensation from Warburg for not executing a sell order for Lasmo shares, despite pre-placing the order.

The exchange worked behind the scenes to avoid a high-profile and costly legal battle between two of the City's biggest names.

Swiss Bank gave Warburg a list of charities, including a Rwandan aid group, and asked it to make total donations of about pounds 300,000.

Neither firm would confirm the size of the settlement. Swiss Bank said: 'It is not Swiss Bank's habit to publicise either the charitable donations that we make or those we procure others to make.'

A preliminary ruling by the Stock Exchange is believed to have upheld a complaint by Swiss Bank. Yesterday the exchange said: 'We are happy the matter has been resolved amicably. We are satisfied that no further action is required.'

The Stock Exchange acknowledged that the affair raised 'unprecedented and complex issues in connection with the interpretation of the exchange's rules'. Its domestic equity rules committee is to work with the Takeover Panel to review regulations for the placing of orders during bid battles. 'We need to clarify grey areas about market-makers' obligations so they are defined with absolute precision.'

Enterprise suffered a humiliating defeat in its bid for Lasmo. Warburg was blamed for misjudging the City's mood.

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