DTI still seeking to quiz Claims Direct chief Tony Sullman

The department of Trade and Industry's seven-month investigation into Claims Direct has been seriously hampered because officials have not yet secured a meeting with the founder of the stricken personal injury company, Tony Sullman.

He did not attend a meeting scheduled with DTI investigators in August about his role at Claims Direct, whose share price collapsed by more than 95 per cent in the last year.

The former taxi driver, who made millions from Claims Direct's flotation in July 2000, is understood to have been out of the country for most of the time since August.

Mr Sullman was ousted as chairman of Claims Direct earlier this year, but last month secured the sale of his stake in the business to a private investor, Simon Ware-Lane.

Colin Poole, the co-founder of Claims Direct and its former chief executive, refused to comment about whether he has yet met DTI investigators. Mr Poole also sold his Claims Direct shares to Mr Ware-Lane.

The investigation could lead to a criminal prosecution if the DTI finds evidence that company officials falsely represented its prospects to investors and employees when it floated on the stock market for £180m.

Mr Sullman and Mr Poole and other former directors also face legal proceedings brought by franchisees, who used to handle customers with personal injury claims. Class Law, the solicitors, will invite all 2,500 shareholders to participate in a class-action lawsuit.

Separately, Claims Direct will announce its plans todayto shed many of the 200 remaining franchisees to cut costs, before the business is folded into Claimline, a personal injury company controlled by Mr Ware-Lane.