Merlin Biosciences, the €450m venture capital fund, has confirmed it is facing a Serious Fraud Office investigation. The probe is believed to centre around a "missing" £2.5m.

The company said: "Merlin wishes to confirm that it is working with SFO in a preliminary inquiry concerning an investment made by one of its funds." It added it would be inappropriate to comment further, according to the Independent newspaper. The paper also reports the SFO has already visited the home of Merlin chief exec Mark Clement

Merlin was founded in 1996 by Sir Christopher Evans and has invested in 35 European bio and life science firms since then. He has written to investors to reassure them that the investigation stems from a misunderstanding. Evans is a sometime government advisor on scientific matters. ®

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