US retailer Fleming yesterday [Wednesday] said a lawsuit alleging its inflated its stock price by falsely portraying sales is 'baseless'.

Shares in the group have fallen to their lowest level in decades since the lawsuit was filed on 30 August. Filed in a federal district court, the suit alleges that Fleming deliberately misled shareholders by releasing upbeat statements about its financial shape, thus driving the stock price up.

The suit charges that Fleming capitalized on its statements by arranging the sale of US$355m of new Fleming securities, including 8 million shares of stock at US$19.40 per share, and US$200m in notes, reports Reuters.