Malcolm Walker

A secret internal memo printed in the Mail on Sunday newspaper yesterday suggests that Malcolm Walker knew sales had “fallen off a cliff” two months before he netted £13.5m (US$19.5) from the sale of shares in the Iceland frozen food empire.

Walker, founder and former chairman of Iceland, has consistently maintained that he knew nothing of the firm’s financial troubles before offloading half his stake last December, when shares were trading at close to an all-time high of 339p.

According to the memo he signed on 23 October to other Iceland executives, however, Walker knew that “sales have fallen off a cliff… It’s not been a good year”. He points to the overheads of early 2000 as being “out of control” and mentions that Iceland’s auditors, Ernst and Young, had expressed concern over the high percentage of sales generated by the supermarket’s trademark “Buy one, get one free” offers.

Walker was forced to resign on 30 January; just weeks after the company issued a profit warning on the back of a dramatic slump in 2000 H2 sales, which prompted share value to fall sharply to around half their value in December.

Last week, Iceland shares had still not climbed above 170p.

In the city, the Department of Trade and Industry and the Financial Services Authority are currently conducting investigations into share dealing at Iceland, but Walker is confident that he will be found innocent of any wrongdoing.

He maintains that the share sale was timed to prepare for his retirement in March.

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