Spreadbet boss wins Plumber wager

THE shares at the centre of a controversial wager that sparked a major investigation now belong to the owner of the spread-betting firm that first accepted it.

Intercapital Private Group, owner of betting firm City Index, now holds 16.52% of biotech company Cyprotex, which it bought at 1p a share.

The shares closed on Friday at 9p, resulting in a paper profit of £1.68m for Michael Spencer, chief executive of money broker Icap, and majority shareholder of IPG. He is named as beneficial owner of the 21m shares.

Ironically, IPG bought the shares from investment bank Dresdner Kleinwort Wasserstein, which was forced to buy them to offset a spread bet accepted by City Index.

The Financial Services Authority launched a major investigation into the flotation of Cyprotex two years ago after it emerged that Paul Davidson, the entrepreneur known as The Plumber, had placed a £5m spread bet on its shares with City Index.

The size of the bet forced City Index to buy shares in Cyprotex through DKW and the investment bank subsequently ended up as the biggest shareholder.

Davidson, who is appealing against a £750,000 fine by the FSA for his role in the flotation, is being sued for £900,000 by City Index. The company claims it was unable to launch legal action against him until it had closed out the position and crystallised its losses.