Doubts over Lonrho issue

A LONG shadow fell over the pounds 181m cash-raising operation of Lonrho, the international trading conglomerate, yesterday. Genting, the Malaysian casino operator, declined to comment on whether it was taking additional shares in Lonrho as a result of the chief executive Rowland 'Tiny' Rowland's proposed rights issue.

At the same time there was lack of demand for Lonrho's nil-paid rights issue shares in the first trading day. Shareholders who do not want to take up their rights would normally try to sell their entitlements. Only token prices of 1/4 p, 1/2 p and 3/4 p were registered in the market for nil-paid shares, which showed zero volume, closing at 1/2 p. The ordinary shares showed a turnover of only 1 million shares, finishing 1 1/2 p up at 71p.

Genting, which has a 7.3 per cent stake in Lonhro, said yesterday that it had 'no comment to make' on whether it would be participating in the three-for-ten rights issue at 85p a share. Nor would Genting comment on whether it had sought to buy 75 million shares of Mr Rowland's personal holding in the last few weeks.

Mr Rowland has agreed to sell 6.5 per cent of his personal shareholding to the little-known German businessman, Dieter Bock, who has agreed to underwrite the rights issue.

This could leave Mr Bock with between 9 and 19 per cent of Lonrho, depending on the success of the rights issue.