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BBB share price plummets after profit alert over FSA probe

Berkeley Berry Birch’s share price has fallen by more than half after it announced that an FSA investigation into the sale of two products by a subsidiary would affect profits.

BBB says turnover for the year ended March 31 is likely to be below market expectations, blaming a slowdown arising from the impact of the continued FSA investigation into sales of two Berkeley Independent Advisers’ products – whole-of-life plans and regular savings contracts.

BBB had previously said that there was no reason to revise earnings’ guidance for the financial year because of the investigation.

The investigation is into plans sold by Berkeley Independent Advisers between December 2001 and September 2004, representing 3,150 sales. Sales of the products are still suspended.

A statement from the board of BIA says the costs of the investigation remain uncertain at this point although they could be substantial if a full review is required.

A separate ongoing investigation into another subsidiary, Berry Birch & Noble Financial Services, has already cost BBB 500,000 in legal fees.

BBB’s share price fell from 13.50 to 6 after the profit warning on Monday. The share price had risen dramatically since January amid speculation that the company was planning to go private.

BBB chief executive Clifford Lockyer says: “This slowdown mainly arises from the impact of the FSA investigation on BIA as sales of the products under investigation are no longer being made.”

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