Police to investigate Pandora float

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Bank accused of not disclosing its own stake as it advised investors.

Pandora is hitting the headlines for all the wrong reasons again today as Denmark’s financial regulator calls for a police investigation into a bank involved its IPO.

Swedish bank Nordea has been accused of failing to report that it held a 3.9% stake in the jewellery business, worth approximately £145m, as it published glowing reports about Pandora as a potential investment opportunity and urged its clients to buy into the company, according to a report by The Times.

Nordea has admitted fault to The Times and said that it will be chaining its policies going forward. The bank had relied on a general disclaimer rather than openly telling potential investors that it had an interest in the company.

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Pandora floated on the Danish stock exchange in October and at the time was valued at £3.22bn, which made it Denmark’s biggest IPO in 16 years. However, this month the jewellery company issued a profit warning as chief executive Mikkel Olesen left the business and since its initial float the company has lost 80% of its value.

At the time of the float analysts were wary of Pandora, due to its heavy reliance on the charm phenomenon, warning potential investors that unless the business could diversify then it would be in trouble. In the UK, Pandora has launched a huge consumer ad campaign to try to convert fans of the brand to its non-charm jewellery but as yet charms still make up the bulk of Pandora’s sales.

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