Morrisons quiet on ‘insider trading arrest’

22-Jan-2014 - Last updated on 24-Jul-2024 at 14:03 GMT

Morrisons confirmed an arrest had been made but released no further details

Morrisons is refusing to confirm or deny reports that its group treasurer Paul Coyle has been arrested on suspicion of insider dealing, in advance of the supermarket’s partnership with online grocer Ocado.

A Morrisons’ spokesman told FoodManufacture.co.uk: “We can confirm an arrest has been made but nothing more.”

The Financial Conduct Authority (FCA) also confirmed that an arrest had been made in December in conjunction with North Yorkshire and West Yorkshire police. “We arrested a 49-year-old man in Halifax in December, after searching premises in Harrogate,” an FCA spokesman told this website.

“The search was in connection with insider dealing and market abuse allegations,” said the spokesman.

‘Market abuse allegations’

Meanwhile, widespread media reports claim the arrest resulted from allegations that Coyle – who is also the supermarket’s head of tax – bought Ocado shares before its £216M partnership with Morrisons was announced.

After the deal was announced, shares in Ocado have risen by more than 250%, as the online grocer was deemed to have transformed its business prospects thanks to its 25-year partnership with the leading supermarket chain.

It is understood that Coyle has yet to be charged with any offence but has not returned to work since the alleged arrest.

The penalty for insider trading can include a big fine and a prison sentence of up to seven years.

Unhappy Christmas for Morrisons

The news comes after an unhappy Christmas for Morrisons, which reported like-for-like sales down by 5.6% for the six weeks to January 5. Total sales fell by 1.9%, excluding fuel and by 3.3% when fuel was included.

City analyst Shore Capital described the results as “disastrous”, commenting: “Morrisons has surprised us with an especially disappointing trading update today [January 9].”

Morrisons’ boss Dalton Philips blamed the lacklustre results on discounting by rivals and the growing importance of online and convenience channels – both of which are weak areas for the retailer.

“In a very tough market, our sales performance over Christmas was disappointing”, said Philips. “However, we are firmly focused on driving our core business and accelerating our penetration of the fast-growing channels.”