Regan must go for Lanica to relist

Andrew Regan is set to resign from Lanica Trust as a condition of its relisting on the Stock Exchange, following a possible breach of Exchange rules regarding investment trusts.

Lanica, the public holding company controlled by Mr Regan, may have breached listing rules relating to investment trusts by taking too active a role in the management of Galileo, the unlisted company used to mount the aborted bid for the Co-operative Wholesale Society.

Mr Regan is understood to have been asked to explain to the Stock Exchange the nature of Lanica's role in Galileo, in which it had a 20 per cent stake.

The Exchange's rules state that a company applying for a listing as an investment trust "must be a passive investor and must not control or seek to control, or be actively involved in the management of any companies or businesses in which it invests."

If the Exchange finds Mr Regan was taking too active a role he will be forced to resign before Lanica shares can be relisted. On Friday, the company said it could relist later this month after publishing annual results and clarifying its legal position in relation to damages claimed by CWS.

The bid for the Co-op never materialised after CWS won an injunction against Mr Regan, his bankers Hambros, and the other shareholders in Galileo: Schroders Asset Management, Jupiter Tyndall and the stockbroker Killik. Confusion mounted as it emerged that Mr Regan was not a director of Galileo, but was clearly orchestrating its actions.

The Exchange is also conducting an insider dealing inquiry into "unusual" movements in Lanica's share price prior to its suspension in February. The shares shot up from 58p in October 1996 to pounds 20.50 in January.

The Serious Fraud Office is investigating a pounds 2.4m payment by Hobson, Mr Regan's previous company, to Trellis International, a company registered in the British Virgin Islands and controlled by Ronald Zimet, an Israel- based Dutch citizen, in 1995.