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Watchdog probes DaimlerChrysler

Date Class
4th Aug 2005 Other Issue
Germany's financial market watchdog has launched a probe into possible insider trading in shares of carmaker DaimlerChrysler.

DaimlerChrysler's share price jumped last week ahead of chief executive Juergen Schrempp's announcement that he would step down at the end of the year.

Following the announcement, the shares surged as much as 10%.

Berlin-based regulator BaFin said that it was "looking into all deals" ahead of Mr Schrempp's announcement.

The probe is not being directed against any individual at present. But it aims to ascertain whether or not the early surge in share prices was down to insider trading.

Insider trading is when individuals buy or sell stocks on sensitive corporate information that has not been released to all shareholders.

If found guilty, individuals can face lengthy prison sentences.

Mr Schrempp will step down at the end of 2005, two years early, and will be replaced by Dieter Zetsche, head of the firm's Chrysler division.

The company has seen its earnings come under pressure as steel prices have increased and competitors have offered cut-price deals to lure customers.

Mr Schrempp had also been criticised for plans to expand globally and problems at the company's flagship Mercedes division.




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