SEC probe puts Google on hold

THE 'informal inquiry' by American regulators into the how internet search engine Google awarded stock options to staff is thought to be the main reason behind a last minute hold-up in the firm's stock market listing.

The company has admitted that it neglected to register millions of shares that were issued from September 2001 to July 2004, primarily to staff and consultants.

To comply with regulations Google has said it would buy back the shares and options for $25.9m (£14m).

Google had asked the Securities and Exchange Commission to make effective its listing registration statement by 4pm yesterday in New York (9pm in London), but a spokesman issued a statement saying there was a delay without giving a reason.

Tom Taulli, co-founder of CurrentOfferings, an Initial Public Offering research company, said the informal inquiry could be the reason for the delay in the long-awaited float. 'I'm not saying it's going to derail the IPO, but maybe they want to look at it further,' he said.

Back in April, Google announced what would be the biggest ever internet float. Google anticipates its 25.7m shares will be priced between $108 and $135 via an ongoing auction. If they trade at the mid-point - $121.50 - that values Google at $32.6bn and make founders Sergey Brin and Larry Page multi-millionaires.

But industry watchers believe the final share price may well come in below $100.