Page last updated at 11:29 GMT, Thursday, 12 June 2008 12:29 UK

Woolworths faces disclosure fine

Woolworths store
Woolworths has accepted the fine

Retailer Woolworths has been fined 350,000 for failing to disclose important trading information to investors as soon as possible.

The retailer was found not to have updated the market on a change to a key commercial contract, likely to reduce its profits by 8m, for nearly a month.

The Financial Services Authority (FSA) said the firm's behaviour in the matter was "unacceptable".

Woolworths said it accepted the fine, stressing the lapse was not deliberate.

'Inside information'

According to the FSA, Woolworths learnt on 20 December 2005 that the terms of a contract to supply goods to its subsidiary Entertainment UK had changed.

However, it did not inform the stock market of what the FSA said was "inside information" until 18 January 2006, when it updated investors on its performance in the run-up to Christmas.

Investors deserve higher standards than Woolworths showed
Margaret Cole, FSA director of enforcement

The lapse, the watchdog added, created a "false market" in the retailer's shares over the five week period.

Woolworth is the latest company to be brought to book for failing to fully disclose relevant information to the market in a timely manner since the FSA gained powers to punish firms for such behaviour.

MyTravel, Pace Micro and Marconi are among other firms to have been fined for similar violations of disclosure regulations.

Co-operation

The FSA said Woolworths, which co-operated with its inquiry, had been guilty of "negligence" rather than a "malicious" attempt to deceive the market.

"Clean, efficient and orderly markets depend on timely and proper disclosure of relevant information," said Margaret Cole, the FSA's director of enforcement.

"Investors deserve, and the FSA expects, higher standards than Woolworths showed."

Woolworths said it would not appeal against the decision.

"Woolworths accepts the judgment," it said in a statement. "The company is pleased to note the FSA's finding that the breach was not deliberate."




SEE ALSO
Sales decline knocks Woolworths
16 Jan 08 |  Business
Woolworths sees challenges ahead
02 Apr 08 |  Business

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