German car giant BMW is under investigation for possible financial irregularities during the selling of Rover, reports the UK`s Financial Times (10/8/00).
The German Federal Securities Supervisory Office are investigating possible insider trading transactions alongside other breaches of German financial regulations, although it said that its investigation was at an early stage and it was unsure as to whether these allegations would lead to legal action.
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The probe centres around whether fluctuations in the share price of BMW, prior to March 16th BMW board meeting that agreed the selling of Rover, were due to insider trading by BMW employees.
The regulator is also examining whether the BMW board had already agreed to dispose of Rover before that meeting took place. A German newspaper had reported that BMW was to sell Rover two days earlier, says the FT.
BMW is also being investigated for a breach of the so-called `ad-hoc publicity law` in its sale of Land Rover to Ford, where BMW held a mid-morning conference on March 16th unveiling the Land Rover deal, while Ford decided to purchase at midnight.
Companies are obliged, by law, to publicise share-sensitive information to the stock market as soon as possible.
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By GlobalDataThe German car-maker is also facing a DM100m+ lawsuit from around 190 Rover dealers, blaming BMW for misleading them when they invested in Rover, continues the UK report.
The compensation claim revolves around loss of business due to uncertainty during both the sale of Rover and that of Land Rover to Ford.
The German car manufacturer declined to comment.
