Redstone hit by DTI/FSA investigation
From bad to worse
The Department of Trade and Industry (DTI) and the Financial Services Authority (FSA) are investigating troubled broadband telco, Redstone Telecom, over whether it kept investors properly informed over price-sensitive information, today's Independent reported.
The investigation centres on a statement issued on May 8 in which the company said that at the end of March 2001, it had £18.7 million in free cash.
This, the company said, would enable it to "operate within its existing financial resources".
Two days later, the telco issued a follow-up statement intended to "clarify" the situation in which it admitted that the £18.7 million figure included £3.4 million already allocated for acquisitions made last year.
As a result FD, Alan Harrold, left the company saying that "he felt he had to resign".
Six weeks later Redstone' chief exec, Graham Cove, walked out citing "differences over the company's future direction".
Redstone has played-down the DTI/FSA investigation describing it as "old news".
A spokesman for the company told The Register that the DTI/FS hadn't been in contact for three months. ®