Insider dealing probe at World Online

Dutch authorities are investigating allegations of insider trading at World Online, the internet service provider whose share price collapsed shortly after it floated in March.

In a statement, World Online said it was co-operating with the Dutch Prosecutor of the Justice Department, who began an investigation at the company's Rotterdam headquarters on Monday.

Controversy surrounding the disastrous initial public offering (IPO) had centred on World Online founder and former chairwoman Nina Brink, who was forced to resign in April when it emerged that she had sold most of her stake at six euros a share, just prior to the IPO.

The revelation sparked a massive sell-off of World Online, which floated at 43 euros a share in what was Europe's biggest offering of shares in an internet company.

Angry shareholders later claimed they had been misled over the company's value and launched a number of lawsuits alleging wrong-doing on the part of World Online.

Derailment of Tiscali takeover?

Tiscali - the Italian telecoms and internet firm that in September said it was buying World Online for $5.1bn - made no immediate comment and did not indicate whether the probe might derail its takeover plan.

The prosecutor said the investigation was a criminal one but said no further details would be given until it had been completed.

A spokesperson for Ms Brink declined to confirm or deny that she was a target of the investigation.

World Online shares slipped 7% after the announcement, to stand at 12.45 euros at 1440 GMT.

In October, they had touched a low of 9.50 euros.