By Ben King, 13 August 2001 17:15
NEWS Troubled telco Redstone is facing a Financial Services Authority investigation for allegedly misleading investors about the true state of the company's finances. The company is alleged to have told analysts at a briefing that it had £18.7m of cash at the end of March, but £3.4m of that money had already been set aside for acquisitions. The mistake was corrected two days later but the group's finance director Alan Harrold resigned in the wake of the affair. The Department of Trade and Industry and the Financial Services Authority are now investigating whether the incident constitutes a breach of stock exchange rules. Redstone, formerly Redstone Telecom, is a pioneer of the local loop unbundling process, launching trials of its SDSL broadband service in April. However, the company has been badly hit by the slowdown in the telecoms market and has scaled back its planned roll-out of broadband sites. The company has adjusted its focus towards IT network services, dropping the "telecom" from the company's name in a bid to stay afloat.
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