Watchdog cuts teeth on SAB affair

THE Financial Services Authority is investigating last week's South African Breweries affair. Papers were doctored and leaked to suggest Belgium's Interbrew was to launch a bid for the FTSE-100 group.

The regulator assumed full powers to check market manipulation only on Friday. It will be an early test of the new FSA. Interbrew contemplated a friendly merger with SAB, but internal papers were changed to suggest a hostile bid at a higher price, lifting SAB shares. Interbrew denied a bid. In Brussels, Interbrew sued for damages against the - as-yet-unknown - people responsible for the plot.

SAB has raised about £250m in a placement of shares at 445p each to help fund a recent acquisition in Honduras. The shares were placed with institutional shareholders at a slight discount to Thursday's closing price of 453p. Last week, SAB bought 97% of Cerveceria Hondurena, the sole brewer and largest soft drinks bottler in Honduras, for £381m from the Dole Food Company.