Google market debut draws near

The SEC needs first to approve the flotation document

Google's planned flotation has moved a step closer after the company asked regulators to approve the paperwork required for its shares to be sold.

Final approval for Google's estimated $3.3bn (£1.79bn) market launch could be in place by 2000 GMT on Tuesday.

This would clear the way for trading in its shares to begin on Wednesday.

Google also revealed that the US stock market watchdog had launched an informal inquiry into its failure to register shares given to employees.

Penalties

There was no sign that the inquiry would delay the firm's market debut.

Google declined to comment on the probe, launched on Monday by the Securities and Exchange Commission (SEC).

It centres on Google's failure to register 23 million shares and 5.6 million share options which it offered to employees and consultants, a possible breach of US stock market rules.

Google could face fines if the SEC finds that the share issue was contrary to stock market regulations.

The company has offered to buy back the shares, albeit at a lower price than they are expected to reach when traded on the stock market.

There is no guarantee that the holders of the shares will accept the buyback offer. Some may choose to sue the company instead.

Bids

A 'Dutch auction' aimed at setting the price of Google shares is already under way.

The auction is designed to give small investors a better chance of getting their hands on the shares that have been made available.

Potential investors are asked to specify both the price they are willing to pay, and the number of shares they want.

Shares are then allocated beginning with the highest-priced bids and working down the list until they are all accounted for.

The lowest bid then becomes the issue price, and the flotation can then begin.

Analysts estimate that the firm could be priced at between $108 and $135 a share, valuing it at $36bn (£19bn).

Google will trade on the technology-heavy Nasdaq exchange.