/raid1/www/Hosts/bankrupt/TCREUR_Public/020507.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

              Tuesday, May 07, 2002, Vol. 3, No. 89


                            Headlines

                          *********

* B E L G I U M *

SABENA SA: Liquidators May Sue Swissair and Demand EUR 3BB

* F R A N C E *

MOULINEX BRANDT: Works Council Finds Appeal Rejected

* G E R M A N Y *

CARGOLIFTER AG: Agreement With Boeing Boosts Airship Project
DEUTSCHE TELEKOM: Banks Cut Ratings Due to Weakening Position
FAIRCHILD DORNIER: Braun Floats Dassault as Possible Investor
GUB CAPITAL: EUR 130MM Fund Manager Files for Insolvency
KIRCHMEDIA: Rewe Questions Competence of Interim Administrators
KIRCHMEDIA: Won't Relinquish Rights to World Cup Despite Woes

* I R E L A N D *

SOLECTRON: Factory Shutdown Leaves 375 Jobless in Dublin

* I T A L Y *

FIAT SPA: Fiat's Ratings Placed on Rating Watch Negative

* P O L A N D *

ELEKTRIM SA: New Chair Scrutinizes Deals, Might Sue Ex-directors

* S W I T Z E R L A N D *

ABB LTD: Secures US$ 330MM Statoil Contract in Norway
SULZER MEDICA: Recalls Heart Valve Tester Following U.K. Death
SULZER MEDICA: Declares No Product Recall, Replaces Testers

* U N I T E D   K I N G D O M *

BIOCOMPATIBLES INTERNATIONAL: Raises GBP 43.5MM for Eye Care Unit
CONSIGNIA: To Cut 50 Senior Managers by Year's End
CONSIGNIA: To Return to Old Name to Gain Back Credibility
IMPERIAL CHEMICAL: Huntsman Stake Impacts First-Quarter Results
NTL INCORPORATED: Knapp to Revive Merger Talks With Telewest
RAILTRACK PLC: Cash call From Regulator Jeopardizes Exit Plan
RAILTRACK PLC: Schroder Salomon Opens Probe on Insider Trading
SCOOT.COM PLC: British Telecom Interested in Brand Name


=============
B E L G I U M
=============

SABENA SA: Liquidators May Sue Swissair and Demand EUR 3BB
----------------------------------------------------------

Sabena's liquidator Christian Van Buggenhout said they are
considering a suit against Swissair Group for EUR3 billion (US$
2.7 billion).

According to ATW Online, Mr. Van Buggenhout revealed the plan
before the special parliamentary commission.  He was quoted as
saying that "the withdrawal of Swissair put Sabena in an
irreversible situation."

The liquidator had allegedly said that Swissair was one-sided in
forcing decisions on Sabena's board and management, behaving as
de facto controllers despite Swissair holding a mere 49.5% stake
in Sabena.

Mr. Van Buggenhout, however, admitted he is still seeking the
right to examine the minutes of Swissair's board meetings and
that he needs more evidence to support his claim.

If it pushes through, this suit will be separate from one filed
by the Belgian government regarding the amount of the re-
capitalization that a Swiss shareholder promised and failed to
pay in October.


===========
F R A N C E
===========

MOULINEX BRANDT: Works Council Finds Appeal Rejected
----------------------------------------------------

An appeal filed by the works council of French home appliance
maker Moulinex over the Nantes Commercial Court's decision to
allow the partial takeover of French competitor SEB, was
overturned by the Versailles court of appeal.

Union representatives had requested a re-examination of the
acquisition offers put in for Moulinex, a report obtained from La
Tribune said Friday.

The court of appeals found no reason to overturn the commercial
court's ruling, which was made on October 22 last year.  


=============
G E R M A N Y
=============

CARGOLIFTER AG: Agreement With Boeing Boosts Airship Project
------------------------------------------------------------

German airship-maker CargoLifter AG announced last week that it
had signed a letter of intent with Boeing to examine potential
business opportunities.

The agreement, however, does not mean that the company
automatically gets financial aid from the American aircraft-maker
nor would it lead to an investment to its current project, a 260-
metre long zeppelin-like airship, says the Financial Times.

The paper, however, notes that the transaction represents a much-
needed vote of confidence in the technical and business
feasibility of the airship.  This bodes well for the company's
chances at getting financing from the capital markets.

The project is estimated to cost EUR720 million or 22% more than
the forecast a year ago, the report says.  The company therefore
needs an additional EUR420 million.  The company plans to raise
this money through a capital increase this summer and government
funding.

Boeing did not promise aid or guarantee that it would provide one
in signing the letter of intent, the paper says.  The agreement,
however, affords Boeing potential access to German technology.

"Once completed, we will have a stronger basis to decide whether
entering into a long-term collaborative arrangement is in our
mutual interests," Boeing was quoted by the Financial Times as
saying.  

CargoLifter's airships are designed to transport heavy loads such
as mining and construction equipment. The letter of intent
provides the basis for studying business opportunities, including
the development of a stratospheric airship for commercial and
military applications, the report says.

CargoLifter has already built a giant hangar in which to develop
and build its airships, but the project remains a long way from
completion.  In March, the company held back the development of
its prototype, which will now take-off in the spring of 2005, two
years later than forecast at its initial public offering two
years ago, the paper says.

The company is expected to breakeven in 2006-2007.


DEUTSCHE TELEKOM: Banks Cut Ratings Due to Weakening Position
-------------------------------------------------------------

Brokers are downgrading their ratings of Deutsche Telekom AG due
to its deteriorating fixed-line business and the substantial
write-down on the company's mobile phone U.S. licenses.

Handelsblatt says Goldman Sachs lowered its investment rating of
the German telecom incumbent last week to market perform from
market outperform.  Accordingly, banks see the company's fixed-
line unit as weakening and will slow down.      

Goldman believes the fixed-network performed poorly in the first
quarter.  Merrill Lynch, on the other hand, expects earnings
before taxes, interests, depreciations and amortizations (ebitda)
at this division to fall by up to 8%, the report says.

Since the entry of competitors, Telekom's fixed-network business
has recorded falling revenue and prices.  The company has
forecast operating profit in this unit to rise by only two-digit
percentage this year, substantially lower from last year's
projections.

Meanwhile, the banks expect the group to take a one-time charge
of EUR4.3 billion in Voicestream's first quarter results.  This
as a result of the new write-down rules for mobile phone licenses
in the U.S., the report says.

The U.S. subsidiary will record a EUR4.6 billion loss as a result
of this charge.  The group's finances as a whole, however, won't
be affected by this write-down, the German daily says.


FAIRCHILD DORNIER: Braun Floats Dassault as Possible Investor
-------------------------------------------------------------

Dassault Aviation, a military plane manufacturer, was hinted by
Fairchild Dornier administrator Eberhard Braun as a possible
investor in the company.

The insolvency administrator was quoted by daily Die Welt last
Saturday as saying that it is "conceivable" for Dassault to be
involved.

"Of course, there is the possibility that a military supplier
could [take a stake] in Fairchild Dornier," Mr. Braun told the
daily.

Since filing for insolvency last month, several parties have been
rumored to be interested in taking over or buying parts of the
insolvent regional plane maker.

The big boys in the industry like Boeing, Bombardier and European
Aeronautic Defense and Space Co, however, have snubbed the German
firm.


GUB CAPITAL: EUR 130MM Fund Manager Files for Insolvency
--------------------------------------------------------

German venture capitalist GUB Capital filed for insolvency on
April 16 after failing to take off during its eight-year
existence, says Suddeutsche Zeitung/FT Information.

The company held EUR130 million in management, contributed by
more than 10,000 investors with minimum investments of EUR15,000
each.  The company had seven funds in its portfolio.

The report did not provide further details.


KIRCHMEDIA: Rewe Questions Competence of Interim Administrators
---------------------------------------------------------------

Rewe CEO Hans Reischl, one of the minority shareholders willing
to revive an EUR800 million capital hike proposal, expressed
doubts last week on the ability of KirchMedia's administrators to
take the firm out of insolvency.

According to the Financial Times, Mr. Reischl questioned the
competence of Wolfgang van Betteray and Hans-Joachim Ziems due to
their lack of exposure in the media sector, notwithstanding their
supposed expertise as insolvency lawyers.

"Two people who never had anything to do with the media sector
are now heading the company. I am tearing my hair off over this,
they really have no idea about rights trading," Mr. Reischl told
Financial Times Deutschland.

Mr. Reischl, whose company ranks as the third largest shareholder
of KirchMedia with 5.71%, is the first to publicly berate the
administrators, although it has been known that others like
Rupert Murdoch's News Corporation and Italian Prime Minister
Silvio Berlusconi's Mediaset shared the same doubt.

Recently, the two interim administration received flak over the
hiring of Ralf Kogeler to advise them on KirchMedia's
restructuring.  Mr. Kogeler is a former finance director of Axel
Springer who fell out of grace with the publisher last year.  He
is a partner at the Munich-based Roland Berger management
consultancy, the report says.  

The German publisher has also raised the issue of conflict of
interest since Axel Springer currently has a suit pending against
KirchMedia.


KIRCHMEDIA: Won't Relinquish Rights to World Cup Despite Woes
-------------------------------------------------------------

Insolvent media rights firm KirchMedia is not selling its rights
to the 2002 and 2006 football World Cup, despite receiving
several expressions of interest for them, says AFX News.

In an interview, interim administrator Michael Jaffe told the
daily Sueddeutsche Zeitung on Saturday that efforts to take the
rights from the company will only be futile.

"There is no reason for a clearance sale, and also not for the
[World Cup] rights," he said.

KirchMedia chief Wolfgang van Betteray also confirmed Mr. Jaffe's
stance.

"[There will be] no haggling about [something] which is not for
sale," Mr. Batteray was quoted as saying.

Recently, Bertelsmann AG's agency Sport Five expressed intentions
to take over KirchMedia's contract with Fifa, the governing body
of world football.


=============
I R E L A N D
=============


SOLECTRON: Factory Shutdown Leaves 375 Jobless in Dublin
--------------------------------------------------------

Solectron recently announced last Saturday the closure of its
electronics manufacturing company, affecting 375 jobs in the
process.

Solectron, based in Clonshaugh industrial estate on Dublin's
northside, said the closure was part of its restructuring
program, the Irish Times said.

The company will shut down all manufacturing operations by
August.

Peter Rivett, general manager of Solectron Ireland, blamed its
woes to the changing market conditions and decline in demand.

The company lost US$126 million (EUR138 million) in the last
quarter and has cut 30,000 jobs as part of its worldwide
restructuring program, which it started last year.  

The Irish activities had not been profitable for over two years,
Mr. Rivett said without citing figures.

Saturday's announcement comes just a year after Solectron
completed an extension at the plant, understood to have cost
about US$35 million, as part of a decision made two years ago to
supplement its systems assembly and configuration business to
include printed circuit board assembly operations.

"There are opportunities for staff to relocate within Solectron
in any of the sites at a worldwide level but I'd need to counter
that by saying that, clearly, we are seeing this downturn across
all of our locations and those opportunities will be somewhat
limited," Mr. Rivett added.


=========
I T A L Y
=========

FIAT SPA: Fiat's Ratings Placed on Rating Watch Negative
--------------------------------------------------------

Fitch Ratings has placed Fiat SpA's "BBB" Senior Unsecured and
'F2' short-term ratings on Rating Watch Negative Friday.

At the same time, the "F2" short-term rating for the US
Commercial Paper program of New Holland Credit Co, LLC, which is
guaranteed by Fiat, was placed on Rating Watch Negative.

The action reflects Fitch's concerns about Fiat's ability to
materially improve the financial performance of the automotive
division in the short term, while the group as a whole continues
the restructuring announced in December 2001.

Fiat is suffering from ongoing European market share erosion,
especially in Italy, where it generates a high percentage of its
revenues. Concerns remain as well about Fiat's ability to
maintain its schedule of selling off a basket of assets, also
announced in December 2001.

It is believed that a successful sale would raise EUR2 billion in
FY02 and EUR1 billion in FY03, to halve indebtedness to EUR3
billion. So far, properties were sold for EUR240 million in cash,
while the sale of Magneti Marelli's electronic systems unit has
been announced for an estimated amount of c.EUR200 million.

In the absence of satisfactory cash generation achieved by the
core activities of the group, the current level of industrial
indebtedness is substantially weakening credit protection
measures. Total financial borrowings (excluding financial service
debt) relative to FY01 EBITDA of EUR3.2 billion represented a
leverage of c.1.9x, up from 1.5x in FY00 and a net cash position
in FYE98.

As Fiat's three largest businesses -- including truck unit IVECO
and the world's second largest manufacturer of agricultural and
construction equipment, CNH Global N.V. -- will continue to
operate in highly competitive markets that are undergoing
structural changes and consolidation, the high interest expenses
resulting from those debt levels are unlikely to be offset by
stronger cash flow from other divisions.

The group will therefore be forced to rely on a speedy execution
of the disposals.

Fitch will meet with management to discuss details of the
restructuring initiatives underway, the progress in disposing off
the non-core operations, as well as the outlook on cash
generation of the group's future core divisions.

The Rating Watch is expected to be resolved within the next few
weeks following receipt of satisfactory information about these
issues. Fitch envisages that in a downgrade scenario both the
Short-term and Senior Unsecured ratings would be lowered by one
notch.


===========
P O L A N D
===========

ELEKTRIM SA: New Chair Scrutinizes Deals, Might Sue Ex-directors
----------------------------------------------------------------

Michal Radziwill, the newly appointed chairman of Elektrim's
management board, is reportedly examining closely the recent
contracts entered into by the company to see if any of them were
detrimental to the firm.

The Warsaw Business Journal says it is possible the move is a
preparatory act to filing charges against former members of the
board.  The paper says the Central Investigation Office and the
State Security Office have already started various probes into
some serious accusations against former executives.

Meanwhile, rumors that the company is nearing a deal with
creditors pushed the company's shares 11% up last week.  The
paper, however, cautioned that things could still go wrong and
that creditors might still petition the court to declare the
company bankrupt.


=====================
S W I T Z E R L A N D
=====================

ABB LTD: Secures US$ 330MM Statoil Contract in Norway
-----------------------------------------------------

ABB http://www.abb.com/,the global power and automation  
technology group, has signed a US$330 million contract with
Statoil of Norway for maintenance and modification of six
offshore oil and gas platforms in the North Sea, as well as the
onshore Kollsnes processing plant.

"Most of the maintenance and modification work on the Norwegian
continental shelf is regulated through long-term agreements like
these," says Gorm Gundersen, ABB executive vice president and
head of the Oil, Gas and Petrochemicals division. "Our
considerable experience in the industry and the value we have
delivered customers in the past were key factors in shoring up
this contract."

The five-year platform contract is for Troll A, four Sleipner
platforms and Veslefrikk. The terms also include Huldra and
Kvitebjorn platforms in the initial stages of the agreement.

The contract has options for three two-year extensions and covers
project management, engineering, procurement, fabrication and
installation work.

Implementation starts immediately, and is expected to be in full
operation from the third quarter of 2002.

For the past seven years, ABB has held the maintenance and
modification contract for the Troll and Sleipner offshore fields,
as well as the Kollsnes plant on Norway's west coast.

ABB is a global leader in power and automation technologies that
enable utility and industry customers to improve performance
while lowering environmental impact. ABB has 152,000 employees in
more than 100 countries.


SULZER MEDICA: Recalls Heart Valve Tester Following U.K. Death
--------------------------------------------------------------

Sulzer Medica AG, which recently pulled out from the market its
hip and knee implants, is once more recalling a product, this
time involving its Carbomedics heart valve tester, says
Bloomberg.

The recall follows the death of a patient who underwent a surgery
at the Northern General Hospital in Sheffield, England. According
to the Department of Health, a piece of the tester broke off,
causing the patient's demise.

The health department said surgeons use tester to check the
function of mechanical heart valves after they've been sewn into
the heart.  It was used with the Sulzer Carbomedics bileaflet
heart valve.

Citing the health department, Bloomberg says 7,000 heart valve
replacements are done annually in the U.K. and this is the first
incident of this kind.

The recall of the tester comes as the company struggles to
convince holdouts to join a US$1 billion settlement of lawsuits
over faulty hip and knee implants.

  
SULZER MEDICA: Declares No Product Recall, Replaces Testers
-----------------------------------------------------------

British health authorities have called for an investigation into
the death of a patient three weeks ago while undergoing open
heart surgery at Northern General Hospital in Sheffield, UK.

As of Friday, the facts of the case show that part of an
instrument used to test the functionality of an implanted
mechanical heart valve broke off during the testing procedure,
that may have contributed to the death of the patient.

According to a company statement released Friday, the testing
instrument was not produced by Sulzer Carbomedics, the producer
of the mechanical heart valves, but is presented to hospitals
along with precise maintenance and sterilization instructions.

On Friday, Sulzer Carbomedics, a subsidiary of Sulzer Medica,
announced the company will replace all testers, or instruments
that monitor the functionality of mechanical heart valves once
implanted.

This step is being taken even though initial investigations have
shown no causal relationship between the tester and the
regrettable death of a patient in Sheffield, UK.

While Sulzer Carbomedics is not the manufacturer of the tester
used in these procedures, Sulzer Medica is responsible to health
authorities for maintaining oversight regulations. Any issues of
liability will be addressed after full and complete investigative
results into the particular case are available.

"We are working closely with the responsible authorities to
quickly clarify the facts regarding this unfortunate occurrence",
said Sulzer Medica CEO, Dr. Stephan Rietiker.

Sulzer Medica's subsidiary companies develop, produce, and
distribute medical implants and biological materials for
cardiovascular and orthopaedic markets worldwide.

The product array includes artificial joints, dental implants,
spinal implants and instrumentation, trauma products, heart
valves, synthetic blood vessels and stents for vascular and non-
vascular obstructions.  


===========================
U N I T E D   K I N G D O M
===========================

BIOCOMPATIBLES INTERNATIONAL: Raises GBP 43.5MM for Eye Care Unit
-----------------------------------------------------------------

The Board of Biocompatibles announces that the company received
payment of GBP43.5 million in cash on Thursday from the
redemption by The Cooper Companies, Inc. of the loan note
received as partial consideration for the sale of the Eye Care
Division in February 2002.

Contact Information:

Biocompatibles International plc
Swag Mukerji, Finance Director                        
Tel: + 44 (0)1252 732 732

Dresdner Kleinwort Wasserstein
Charles Batten                                        
Tel: +44 (0)20 7623 8000

Financial Dynamics
David Yates
Melanie Toyne-Sewell                                 
Tel: + 44 (0) 20 7831 3113


CONSIGNIA: To Cut 50 Senior Managers by Year's End
--------------------------------------------------

Consignia Chairman Allan Leighton says some 50 senior managers at
the troubled post office could go at the end of the year as part
of his wide-ranging strategy to turnaround the business.

"We have got to invest in but also take some costs out.  I had
150 top managers together about a week ago and said to them
that...the probability is a third of them wouldn't be around in a
year's time," Mr. Leighton was quoted as saying at a BBC program.

Reuters says Mr. Leighton lamely denied that incumbent CEO John
Roberts is on his way out.  The Financial Times had reported last
week that Mr. Roberts, who have served since 1995, will be
replaced soon.

"John is the chief executive. There has been a lot of
speculation...and I wouldn't comment positively or negatively on
anybody," Mr. Leighton told the BBC.


CONSIGNIA: To Return to Old Name to Gain Back Credibility
---------------------------------------------------------

Allan Leighton, the newly appointed chairman of Consignia, wants
the state-owned mail service to revert to its old name "Post
Office" or use Royal Mail within two years, says the Guardian.

Speaking on BBC's Breakfast With Frost program, Mr. Leighton said
the change would end the confusion among customers and the
brouhaha over the brand change, which cost the firm GBP1 million
to create and implement.

Mr. Leighton also questioned the timing of the change, which was
carried out at a time when the company was losing GBP1.5 million
a day.

"There's not really a commercial reason to do it but there's a
credibility reason to do it - probably in less than two years,"
Mr. Leighton said about the decision to adopt the old name.

The change of name, however, serves only as a backdrop to a
bigger shakeup happening at the struggling postal service.  The
company recently announced a wide-ranging restructuring involving
a large number of redundancies and closure of urban postal
offices.  John Roberts, the CEO who caused the name change, is
also about to be replaced.


IMPERIAL CHEMICAL: Huntsman Stake Impacts First-Quarter Results
---------------------------------------------------------------

The failure of Imperial Chemical Industries to sell its 30% stake
in Huntsman International continues to pull down the company's
earnings in the first quarter.

The group only managed to report GBP66 million profits before
goodwill, amortization and exceptional items, on sales down by 3%
at GBP1.3 billion.  The company only registered pre-tax figures
of GBP54 million.

Finance Director Tim Scott said losses from associates -- in
particular Huntsman -- amounted to GBP13 million causing the dip
in profits.

The company has been unsuccessful in unloading its stakes in
Huntsman since failing to convince parent company Huntsman
Corporation in 1999 to take back its stakes, the report says.  
The company has been trying to reinvent itself as a specialty
chemicals company, with a focus on high-margin, consumer-driven
products.

Analysts told the Financial Times that the stake in Huntsman --
which is now caught in a savage cyclical trough of demand for
old-style bulk chemicals -- will continue to impact the firm's
finances until unloaded.

The recent performance, however, meet expectations, says
analysts.

"The core business has proved pretty resilient through the
economic downturn, just as the company said it would," noted
Peter Cartwright at Williams de Broe in an interview by the
paper.

The Financial Times says if a current deal goes according to
plan, the company should get US$365 million for its Huntsman
stake in about 18 months' time.

The paper, meanwhile, says the group should be able to generate
GBP200 million to GBP300 million from the divestment of Synetix,
the oils and polymers division. The company is expected to reduce
debts by less than GBP2 billion this year as a result of the sale
and the GBP800 million rights issue in February.


NTL INCORPORATED: Knapp to Revive Merger Talks With Telewest
------------------------------------------------------------

NTL Incorporated and Telewest Communications Plc vowed to revive
talks of merging together and put up a strong challenge to
British Telecom and BSkyB.

NTL CEO Barclay Knapp announced his intention to renew
exploratory discussions with UK's No. 2 cable operator last week
after he successfully gained approval for the firm's US$10.6
billion debt-for-equity swap.

"I have been trying to work in that area for ten years,
consolidating UK cable.  It makes a lot of sense for us to get
together and we look forward to taking that issue up again when
we come out of this process," Mr. Knapp told The Times.

Earlier, Telewest Finance Director Charles Burdick told the same
paper that the commercial logic for a merger to create a cable
company with almost five million customers was "strong, if not
stronger than ever".

"The world's just going to get tougher and having the one cable
company competing with BT and Sky (BSkyB) in all product areas is
really what makes the best sense for the consumer and the best
industrial logic," he said.

The paper says NTL and Telewest own cable franchises that do not
overlap.  This means that any deal would result in little
duplication of services and would therefore face little or no
problem at all with regulators.

With NTL's woes now substantially minimized, it is now the turn
of Telewest to gain inroads on its GBP5.3 billion debt-pile. The
company had earlier hinted of doing its own debt-for-equity swap.


RAILTRACK PLC: Cash call From Regulator Jeopardizes Exit Plan
-------------------------------------------------------------

A plan to ask rail regulator Tom Winsor for GBP3 billion in extra
funds to cover expenses for repairing tracks threatens to scuttle
Railtrack's early exit from administration.

According to BBC News, Railtrack CEO John Armitt is planning to
request for a comprehensive review of Railtrack's finances and
plea for more money.  The plan could delay the exit, as it would
take Mr. Winsor until early next year to finish the review.

Citing the Independent, the news channel said a takeover by
Network Rail, the not-for-profit government vehicle, will be held
at bay pending the review.

But a spokesman for the Office of the Rail Regulator said the
agency has yet to receive any notification from Railtrack
regarding the plan.  The Independent, however, said that the
request will likely be made in July or August.

A spokesman for Network Rail admitted that it did not anticipate
this possibility; hence, such a move by Railtrack will render the
exit plan uncertain.

"We are working on the assumption that there won't be an interim
review [of Railtrack's funds]. That is the way the offer is
framed," the unnamed spokesman was quoted as saying.

The money is reportedly needed because the cost of maintenance
and track renewal work rose 21% over a 12 month period in the
wake of the Hatfield rail crash.

The fatal crash was caused by a shattered rail and led to
widespread track testing and replacement.


RAILTRACK PLC: Schroder Salomon Opens Probe on Insider Trading
--------------------------------------------------------------

The recent decision of the Financial Services Authority to
investigate unusual trading of Railtrack shares prior to the
government's announcement to compensate shareholders has prompted
Schroder Salomon Smith Barney to conduct an internal probe.

According to the Financial Times, the investment bank, which is
part of Citigroup, decided to conduct the internal probe as the
issue could damage its reputation.  

The bank acted as investment-banking adviser to the Department of
Transportation, which announced on March 25 that it would pay
shareholders for losses incurred when the government placed
Railtrack into administration.

A report by The Sunday Times recently alleged that Citigroup was
involved in buying 500,000 Railtrack shares through a broker in
mid-March.

In a statement on Sunday, the bank said: "We take such
accusations very seriously and will be conducting an internal
investigation. We have robust Chinese walls and procedures
designed to prevent insider trading."

Rumors are rife that some investors had inside knowledge about
the negotiations over the compensation and had capitalized on
this by buying shares prior to the announcement on March 25.

The Authority has confirmed that it had started an investigation
on unusual trading involving Railtrack shares, but declined to
reveal details of its inquiries.  It said the probe was only part
of its market surveillance routine.  The paper, however, pointed
out that the Authority seldom conducts investigation unless there
were abnormalities in a given transaction.

Shares in Railtrack have been suspended since October 8.


SCOOT.COM PLC: British Telecom Interested in Brand Name
--------------------------------------------------------

British Telecom is allegedly in advanced talks with troubled
online directory service provider Scoot.com Plc, said Bloomberg
Sunday.

Citing the Sunday Telegraph, Bloomberg said the British telecom
incumbent is allegedly planning to build a directory inquiries
service around the Scoot brand.

This move follows the announcement by telecoms regulator Oftel to
scrap UK's "192" directory-assistance service later this year.  
The office plans to open this service to business and
competition.

The report says it is unlikely that British Telecom will pay a
significant premium for Scoot, whose shares closed Friday at 0.65
pence.   At its prime, Scoot shares traded as high as 351.5p.

In its issue last Thursday, the Troubled Company Reporter-Europe
said that unless granted a last minute reprieve, Scoot could have
serious trouble or even fold up by August.

The paper said Scoot recently bared losses of GBP27.8 million in
2001 and an alarming cash horde that will only last it until
August this year.

                                     ***********

         S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
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USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.


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