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View from City Road: Inquiry delay unfair to Suter

Monday 07 September 1992 18:02 EDT
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MESSAGE to Michael Heseltine from David Abell: pull your finger out, Mr President. It is now more than four years since the Department of Trade and Industry began its investigation into Mr Abell's share dealings. As is often the way, the inquiry has yet to bear any visible fruit.

A cloud of suspicion continues to dog Suter, Mr Abell's refrigerators-to- chemicals group. Since inspectors were appointed one day in July 1988, shares in Suter have lost more than half their value while the FT-SE 100 has, even at its present depressed level, risen by 25 per cent.

The continuing uncertainty is unfair to Mr Abell and to Suter's other 7,000-odd shareholders. How long does it take to investigate a few insider dealing allegations?

There is a danger that the cause for concern will be long forgotten by the time the inspectors' report is published. There is no obvious reason for delaying publication. Such leaks as there have been suggest the inspectors will criticise Mr Abell but stop short of recommending prosecutions.

Perhaps the DTI has forgotten about Suter amid its numerous changes of Secretary of State. While the matter may be of no great importance alongside Mr Heseltine's plans for a bold new industrial strategy, Suter is entitled to have it cleared up.

The DTI is not solely to blame for Suter's problems, of course. Profits have fallen in each of the past three years from pounds 39m in 1988 to pounds 17.8m last year.

Yesterday's interims show the group stemming the decline, with pre-tax profits rising by pounds 200,000 to pounds 9.4m thanks to a reduced interest charge. Trading is patchy - sales of refrigeration equipment to supermarkets have slipped, and the crisis in the building industry has further weakened demand for air conditioning. Chemicals was the only division to record increased profits.

Borrowings remain high, effectively restricting any ambitions Mr Abell might have for Hartons, the troubled plastics group where he took over quietly as chairman recently. Suter has a 23 per cent stake which 'speaks for itself', according to Suter's finance director.

A maintained 3.2p interim dividend and the forecast of an unchanged final provide a healthy yield. But there is little else to go for until the DTI makes its intentions known.

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