C&W investors face further woe
Shares in telecom company Cable and Wireless continued to fall following the publishing of a report that predicted tough competition for the group's Caribbean arm.
Link: £1.5bn tax liability for C&W
The troubled business could also face an investigation into why it did not disclose a potential £1.5bn tax liability sooner than it did.
The prediction of fierce competition has shaken investors as the Caribbean unit has been the company’s main cash cow and has caused a major drop in its share price.
It now seems certain that Cable & Wireless will drop out of the FTSE 100 when the index is recalculated today.
The company also revealed earlier in the week that a downgrade in its credit rating had obliged it to set aside £1.5bn as a cover for possible tax liabilities arising from the partial sale of One2One to Deutsch Telekom.
The news shocked shareholders as they had previously been told that there were no potential cash liabilities that the company had to face. The Financial Services Authority is set to investigate the affair.