Lastminute asks FSA for fax-checking probe

Duty to its shareholders

By Lucy Sherriff • Get more from this author

Posted in Financial News, 21st February 2005 11:59 GMT

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Lastminute.com has called in the Financial Services Authority to investigate an anonymous fax that has been doing the rounds in the city.

The fax, titled "Running on Empty", seeks to cast doubt on the company's financial health. It claims that Lastminute's falling margins and dwindling cash reserves could prompt a new round of fundraising, the Financial Times reports.

The company confirmed that it was seeking an investigation. A spokeswoman told us: "We took the decision last week to counter the fax that was circulating."

Brent Hoberman, the company's co-founder and CEO, said that the rumours contained in the fax are untrue. He said Lastminute has a responsibility to its shareholders to report any activity that could create a false market in its shares. The culprits were likely to be "people who took a strong short position before our results and were disappointed that we came in ahead of expectations".

The company reported better-than-expected results earlier this month. Despite a widening loss, Hoberman declared the quarter's performance "solid".

The FSA would not discuss any specific investigation, but said that rumours circulated by fax would be considered in terms of market abuse. A spokesman explained that rumours, whether circulted verbally, by fax or by email, would be treated in the same way.

"The question is what is the intent behind the dissemination of information," he said.

For an investigation to proceed, the FSA would need to have an expectation of finding the person or persons responsible. "With verbal rumours, it is very hard to prove unless you have something on tape. A fax could be from anywhere. It could be impossible to track down, or the resources to investigate could be totally out of proportion."®