M&S: Green and Rose grilled

RETAIL adversaries Stuart Rose and Philip Green both faced lengthy grillings by the Financial Services Authority yesterday, as the regulator hit the ground running in the most high-profile probe in its history.

Rose was called into the FSA's Canary Wharf headquarters at 10am and questioned for two hours over his Marks & Spencer share dealings.

He controversially bought 100,000 shares on 7 May, the same day he was phoned by Green. Rose insists he had no knowledge of Green's bid plans until meeting the billionaire five days later.

Green met the FSA at 4.15pm. He was asked for detailed information about who knew about his takeover proposal prior to the formal announcement on 27 May. He was questioned for an hour and a half.

Regulators also want to look into a punt on Marks shares by ICAP boss Michael Spencer, one day after he met Rose.

The FSA wants to know how news of Green's planned bid leaked into the market. The shares rocketed more than 10% in the two hours before his formal statement, with millions changing hands. During the previous two days, dealing rooms buzzed with talk something was about to happen at M&S.

Green's advisers Goldman Sachs sent a 'holding letter' to Rose, who has accused the investment bank of trying to sully his reputation. Goldman did not bow to Rose's demand for a written retraction.

The dispute centres on a conversation between Rose and Bradford & Bingley finance director Rosemary Thorne in the presence of Goldman banker Phil Raper, which led Goldman bosses to believe that Rose talked about Green's bid plans before they were announced. Rose denies discussing the bid with Thorne.

M&S chairman Paul Myners has dismissed as 'absolute poppycock' the suggestion he may throw Rose to the wolves over his share dealing.

Myners insisted: 'I and the rest of the M&S board are unwavering in the support of Stuart.'

He said anyone spreading stories that Marks might jettison Rose was 'being mischievous and potentially guilty of market abuse'.

He categorically denied Marks was already considering who it might appoint to replace Rose if the dealing furore escalates.

'We have taken no steps,' he said. 'It has never entered our minds.'

Myners, a former head of fund manager Gartmore, argues that too much emphasis has been placed on the purchase of 100,000 shares by Rose.

'The real issue around insider trading must relate to the tens of millions of shares traded in the 24 hours prior to Philip Green being forced to make a statement about his plans,' he said.