Izodia shares suspended after SFO starts inquiry

Shares in the shell company Izodia were suspended from trading on the London Stock Exchange yesterday after the Serious Fraud Office launched an investigation into the alleged theft of funds.

"I can confirm that the SFO is conducting an investigation with Thames Valley Police into an allegation of unlawful appropriation of funds belonging to Izodia plc and possible related offences," a spokesman for the SFO said. "Searches were undertaken earlier today [Monday] at addresses in London and Jersey, where the authorities are providing assistance."

Shares in the company, which used to be called Infobank and which had been one of the stars of the dot.com boom of 2000 developing and selling software, were suspended at 44p each.

The investigation by the SFO is the latest twist in the demise of the company, which earlier this year gave up on its software business. It had planned to reinvent itself by using its cash to buy another business. A group of rebel shareholders disagreed with the new strategy and, meanwhile, the company also received an approach from its largest shareholder, the investment firm Orb. Although a formal offer has never been tabled, the talks forced Izodia to part company with its chairman, Jon Pither, on the basis that he was not "sufficiently independent" to advise on any deal.

But earlier this month, the company bowed to shareholder pressure and said it would hold an extraordinary general meeting to propose it be placed into voluntary liquidation and that Ernst & Young be appointed as liquidator. "The board believes that, by affording shareholders the opportunity to vote on the liquidation of the company, it is acting in accordance with the wishes of the majority of shareholders," it said.

It also said then that Orb was still considering making an offer in the event that the resolution to liquidate the company was not approved but said there was no certainty of a deal materialising.