[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 24 July, 2003, 15:49 GMT 16:49 UK
Watchdog launches Chelsea probe
Chelsea players
Chelsea are one of England's most successful clubs
The UK's financial markets regulator has launched an inquiry into the ownership of Chelsea football club prior to its recent takeover by Russian billionaire Roman Abramovich.

The Financial Services Authority (FSA) said it had been tipped off that the information it had on the number of Chelsea shares owned by some investors may have been inaccurate.

It said it was concerned that "as a consequence the market may have been misled as to the true ownership of Chelsea Village plc".

Investors who own 3% or more of a company are obliged under UK law to declare their holdings, and any changes in the size of them.

KEY POINTS
Did Chelsea's big shareholders admit how much they owned?
If not, FSA could find market was misled about club's 'true ownership'
Anyone found guilty could face unlimited fines
Probe not expected to affect Abramovich takeover
Separate investigation ongoing into possible insider trading
They are required to declare their holdings to the company, which must in turn inform the FSA.

An FSA spokesman said inaccurate information on the ownership of a company can distort the market for its shares.

"You need transparency to enable investors to make reasoned decisions," he said.

Financial penalty

Chelsea Village, the company which owns Chelsea football club, said it was not directly affected by the investigation.

"It is a matter for the FSA and the company is not involved," it said in a statement.

Any Chelsea shareholders found to have concealed the extent of their holdings in the company could face unlimited fines, or be "named and shamed".

Chelsea chairman Ken Bates stunned investors earlier this month when he announced a 140m ($233m) takeover by Mr Abramovich, a Russian oil and metals tycoon with no track record as a football club owner.

The FSA is already conducting a separate investigation focusing on movements in Chelsea's share price in the days before Mr Abramovich's takeover was announced.

Shares in Chelsea Village soared by 40% between 13 June and 1 July, the day the Abramovich deal was unveiled.

A share price rally in the run up to a takeover deal can arouse suspicions of illegal insider trading, although there is no suggestion of wrongdoing by the main parties to the Chelsea takeover.

In a separate statement, the Takeover Panel said on Thursday that it did not expect the FSA's latest investigation to disrupt the completion of Mr Abramovich's acquisition of Chelsea.

In the City, Chelsea Village shares closed at 35.5 pence, unchanged from Wednesday's close.


CHELSEA

SEE ALSO:
Chelsea 'could face share inquiry'
02 Jul 03  |  Business
Russian businessman buys Chelsea
02 Jul 03  |  Business
Profile: Roman Abramovich
01 Jul 03  |  Business
Football's tycoons chase the dream
02 Jul 03  |  Business
Banks calls for Chelsea probe
01 Jul 03  |  Chelsea
Chelsea announce new losses
31 Mar 03  |  Chelsea


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific