Olympic timekeeper denies claims

Swatch, the world's biggest watchmaker, has rejected reports of allegations from two ex-employees that it had evaded taxes and customs duties.

Swatch denied accusations it had broken laws on "transfer pricing" - where goods are charged at differing prices as they pass through subsidiary firms.

Swatch owns 17 watch brands including Omega and Tissot, and is the official timekeeper at the Athens Olympics.

At 1110 GMT Swatch shares were down 5% to 28.8 Swiss francs ($22.90; £12.60).

Swiss roots

Swatch said the case referred to in media reports was down to a "pure employment dispute" between the company and two former employees.

It claimed one of them was seeking a higher separation payout.

"According to the first results of our investigation, it is confirmed that Swatch Group did not violate laws," the company said in a statement.

Instead, it argued, it was simply using transfer pricing to avoid a "grey market", where importers use divergences in prices in different markets to undercut the company's pricing structure.

Its investigation was unlikely to uncover anything with financial consequences, it said.

The firm has net assets of over 1bn Swiss francs and generates net profits of around 500m francs, providing a safety net against any potential one-off costs.

The company is a multinational brand name which was built from modest Swiss roots and is dominated by billionaire Nicolas Hayek's family.