German prosecutors have opened investigations into managers of the former Metro Group, following allegations of market manipulation and insider trading in connection with the company's demerger into Metro AG (B4B.XE) and Ceconomy AG (CEC.XE).
Five managers of the former Metro are being investigated for alleged market manipulation based on the suspicion that the company may have delayed the announcement of its demerger plans, which were published March 30, according to the prosecutors office in Dusseldorf. Such a delay could have allowed someone who knew of the operation to take advantage of that knowledge.
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The investigations into alleged insider trading focus on three managers and one external person. The prosecutors suspect that two employees allegedly purchased Metro shares shortly before the deal was announced. A third person didn't work for the company but allegedly bought shares following a tip from an employee.
A spokesman for the prosecutor did not comment on whether any of the people were the subject of both investigations.
The demerger took effect in July, splitting Metro into two separately listed companies--Metro AG, a wholesale and food company, and Ceconomy AG, a retailer focused on consumer electronics.
The new Metro's premises were searched on Friday by prosecutors and police, after Germany's markets supervisory authority filed charges alleging insider trading and market manipulation.
A Metro spokesman said the company "will continue to fully cooperate with the authorities." He declined to add anything to a statement from Friday, when the company said plans to split into two companies were published "punctually and in accordance with the relevant regulations."
Write to Ulrike Dauer at Ulrike.Dauer@dowjones.com and Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard
(END) Dow Jones Newswires
November 06, 2017 09:40 ET (14:40 GMT)