Citigate rebuke renews calls for regulation

Calls for the regulation of financial PR firms were stepped up this week after the Takeover Panel issued a sharp rebuke to Citigate and its client Triplex Lloyd.

Calls for the regulation of financial PR firms were stepped up this

week after the Takeover Panel issued a sharp rebuke to Citigate and its

client Triplex Lloyd.



In a statement issued on Tuesday, the panel described as ’reprehensible’

the leak by Citigate to the Financial Times and the Guardian of

confidential information about steel casting firm William Cook - which

is the subject of a hostile takeover bid by Triplex.



The panel’s criticism comes a year after its chairman Sir David Calcutt

sent a letter to heads of City PR firms expressing concern about the

number of press leaks before and during bids. The letter followed the

censure of Financial Dynamics in December 1995 for leaking information

while defending Amec against a hostile bid from Kvaerner.



While admitting that transgressions by PR advisers were rare, the

panel’s deputy director general Peter Lee said that Citigate had clearly

flouted the code of conduct by deliberately passing confidential

information to newspapers.



Paul Kafka, deputy chairman of the IPR’s City and financial group,

renewed his call for regulation, arguing that PR firms were being

singled out for criticism precisely because they were not regulated.



The Takeover Panel censure is highly embarrassing for Citigate, which

plans to float on the Stock Exchange through a reverse takeover of

publishing firm Incepta Group. Citigate chairman David Wright was

unavailable for comment.



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