Frozen food retailer Iceland, now known as the Big Food Group, is about to get its knuckles rapped by the Financial Services Authority (FSA), which is expected to announce that the company withheld information from investors about deteriorating sales between September 2000 and January 2001.
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In December 2000, Iceland was scandalised when its founder and then executive chairman Malcolm Walker sold four million shares for £13.5m just weeks before issuing a profits warning that saw the firm’s stock price tumble.
Walker resigned within a month of his sale, but not before the FSA started an investigation into the company’s affairs and its openness with its investors.
Three incidents were flagged for particular attention, as they could have been interpreted as misleading investors.
Iceland’s interim statement of 5 September 2000 saw Walker insist that the company was making “good progress”. He said then that he felt “confidence and enthusiasm”.
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By GlobalDataOn December 13, while Walker’s shares were being told, a meeting of analysts at Iceland’s headquarters in Deeside, Wales, was told that management were “positive on the group’s future prospects”.
Lastly, a statement released on 22 January 2001 revealed that underlying sales had fallen 5.5% during December, traditionally a period of sales growth due to the Christmas traffic.
