High street retail chain Woolworths has been fined £350,000 by the Financial Services Authority for failing to disclose information to the market in a timely manner.
The company failed to discloseinside information that was likely to have a significant effect on its share price, creating a false market position.
Margaret Cole, Director of Enforcement at the FSA, said: 'Clean, efficient and orderly markets depend on timely and proper disclosure of relevant information. Woolworths' failure to disclose vital information led to a false market in its shares for 29 days. This sort of failure is unacceptable.'
The retailing giant's subsidiary, EUK, signed an agreement with Tesco Stores Limited to supply it with entertainment products in August 2004.
The two companies then changed the deal in December 2005, which gave TSL a discount estimated at £8m for a 12 month period from 1 March 2006.
The discount represented a 10% drop in Woolworths anticipated profits for the financial year 2006/2007, but the retailers failed to disclose the information to the market until 18 January 2006. This left Woolworths with an unfair advantage and in breach of Disclosure Rule 2.2.1.
'Investors deserve, and the FSA expects, higher standards than Woolworths showed. We will not hesitate to take action where listed companies fail to meet obligations imposed by the Rules and Principles' said Cole.
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