'Plumber' dumps his stake in Cyprotex

Paul Davidson, the entrepreneur more widely known as The Plumber, has dumped his 35 per cent stake in Cyprotex, the drug research company he founded.

But Mr Davidson, who faces a £750,000 fine over a spread bet which underpinned Cyprotex's flotation in 2002, has not severed his ties with the company. He owns half of Nordan Holdings to which a 29.9 per cent stake in Cyprotex has been sold. Nordan is controlled by Aubach Capital Partners, the offshore investment vehicle of the biotech financier Robert Atwater, who will join Cyprotex as chairman and chief executive.

John Nicholson, chief operating officer of Cyprotex, said Mr Atwater's arrival would help the company distance itself from its controversial past. "We have been looking to disassociate ourselves from Paul. We didn't know about his spread bet and we were exonerated when the Financial Services Authority reported in March. We are a serious company trying to escape from all this scandal."

Cantor Index, the spread betting firm, was forced to buy Cyprotex shares in order to hedge a bet on the company's share price taken out by Mr Davidson at the time of the flotation. The share purchases underpinned the flotation, but Mr Davidson lost more than £5m on the bet when the company's share price collapsed.

As well as the 29.9 per cent sold to Nordan for £2.7m, he has sold the remainder of his stake in the market.

Mr Atwater is a financier and former business development director at BioChem, the Canadian drug firm bought by Shire Pharmaceuticals of the UK in 2000. He is leaving San Francisco-based Thalassa Capital Management, his biotech asset management firm, to take up his new post at Cyprotex.

Mr Davidson said: "This deal is a way of getting a very big hitter into the business. He knows everybody in the pharmaceuticals business. He is extremely bright and well-versed. And he has recognised its potential. I think the fact that he is going to come and work in the company says everything."

Mr Davidson has told the FSA - who he calls "a bunch of toffee-nosed twits" - that they "can stick their fine where the sun don't shine".