Shoprite investors 'misled'

BARCLAYS de Zoete Wedd, one of the City's biggest securities houses, has come under strong criticism from leading institutions over its handling of a share issue.

Unknown to other investors, more than one-fifth of the food discounter Shoprite's pounds 15m preference share issue, which was launched earlier this year, ended up in the hands of BZW, the company's City broking advisers.

One source said: 'A number of shareholders feel that they were misled. They were told that the issue had been successfully placed, when in fact the company's advisers had a fifth of the issue.'

That means the Shoprite shares were less popular than had been generally believed. And there is a danger that BZW will want to filter its holding on to the market, depressing the preference share price.

The pounds 15m share issue was launched in February to help the group finance its store expansion programme. BZW was the largest taker, with more than 3 million shares. Other large takers included the investment institutions City Merchant, GRE Nominees and Scottish Amicable.

A fund manager added: 'If they had told us that they were going to end up with 3 million shares, there is no way that we would have taken any.'

BZW said that it was comfortable with the level of shares it had managed to place outside its own clients. 'We aim to manage issues, and to get 80 per cent away is seen as a success,' said a spokesman.