Collins Stewart sues the FT

COLLINS Stewart Tullett chief Terry Smith today raised the temperature in the row over alleged irregularities at his stockbroking firm, launching a defamation suit against the Financial Times.

Accusing the newspaper of 'muckraking' and 'a hatchet job', Collins said £128m had been wiped from its value since a damaging FT article last Wednesday.

This would be 'a relevant figure' when assessing damages, it said, adding that it would also be seeking a retraction and apology.

Collins said it had hired defamation specialists Schillings and Patrick Milmo QC 'who have advised on the considerable merits of the company's legal position'.

The dispute has added piquancy because Smith has been a critic of FT parent company Pearson, accusing it of a 'con' in the way it presents its accounts to the City.

The case centres on the FT's reporting of allegations by sacked Collins analyst James Middleweek, who accused the firm of disseminating price-sensitive inside information and ramping flotations.

Collins reported Middleweek to the police and the Financial Services Authority, accusing him of blackmail.

Andrew Gowers, editor of the FT, said: 'We stand by our story and believe there was a public interest in reporting these allegations in a balanced way.'

An FT spokeswoman also dismissed as 'absolute nonsense' claims that Pearson was retaliating at Smith.