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Last Updated: Thursday, 26 January 2006, 15:50 GMT
Qinetiq listings probe launched
Qinetiq at Portsdown Hill near Portsmouth
The investigation will start in the next few days
Defence firm Qinetiq is being investigated by the spending watchdog, the National Audit Office (NAO), over its upcoming privatisation plans.

The NAO will be looking into whether parts of the defence company were sold off too cheaply to US private equity firm Carlyle two years ago.

The sell-off is also being investigated by MPs on the Defence Select Committee.

Qinetiq is expected to have a stock market value of up to 1.3bn ($2.31bn) when its shares float in February.

The government's defence research agency has developed all kinds of technology over the years - including radar systems and liquid crystal displays.

Controversy

The agency's more commercial activities have been put into Qinetiq, but the move has created controversy.

Three years ago, a third of Qinetiq was sold off to Carlyle Group, which is now in line for an 800% profit on its investment when it floats on the London stock market.

Qinetiq executives also stand to make spectacular gains, while the number of shares available to private investors will be limited.

"It is routine for the NAO to look at complex transactions of this sort and the MOD has always anticipated that they would wish to examine the Qinetiq privatisation," said a statement from the Ministry of Defence.

"We welcome their decision to examine the project and look forward to co-operating fully with their work."


SEE ALSO:
Qinetiq names float price range
25 Jan 06 |  Business
Government 'to sell off Qinetiq'
08 Jan 06 |  Business
Qinetiq's new battle
30 Apr 02 |  Business


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