ECONOMY

Globo says UK watchdog probes company on financial irregularities

globo-says-uk-watchdog-probes-company-on-financial-irregularities

British mobile technology firm Globo Plc said UK's financial watchdog was investigating the company, just days after it said it was made aware of financial irregularities by its top management.

Globo said on Wednesday that it had reported the matter to appropriate law enforcement agencies in the UK, Greece and Cyprus.

The company said trading in its shares would remain suspended.

The investigation by UK's Financial Conduct Authority (FCA) comes two days after the resignation of Globo's chief executive and chief financial officer. They disclosed some financial irregularities at the company at a board meeting over the weekend.

The emergency board meeting was prompted by a report by U.S. hedge fund and short-seller Quintessential Capital Management that raised questions about Globo's revenue model and finances.

Short-sellers have been targeting large and small firms alike. Valeant Pharmaceuticals was the recent target of an attack by an influential short-seller, which accused the company of using speciality pharmacies to inflate its revenue, sending its stock plunging as much as 40 percent.

Sweden's TeliaSonera was also targeted by U.S.-based investment research firm Muddy Waters earlier this month over the openness of its financial disclosures.

Last year, fund manager Gotham City Research, which went after AIM-listed insurance claims processor Quindell Plc , also took on Spanish wireless network provider Gowex . Quindell is still under investigation by Britain's anti-fraud agency.

Globo stock fell about 27 percent to 28.25 pence last week, valuing the company at about 106 million pounds ($162 million).

[Reuters]