Danish clothing company Carli Gry is being investigated for insider trading, the Berlingske Tidende reported today. The company reported a much poorer annual result than had been anticipated on Thursday, and management reported that the autumn collection had not sold as well as expected. An annual result of 45m Danish Kroner is expected instead of the 60m predicted.

Alarm bells started to ring a day before the announcement however, when the company's shares dropped sharply. The Copenhagen Stock Exchange is now investigating the possibility of illegal insider trading in the shares.

Only 14,000 shares were traded on Wednesday but at a rate 17 per cent lower than Tuesday. Investigations at the moment are still "routine" the Stock Exchange said.

Carli Gry's prospects for next year do not look good. Results of DKR 100m are expected, instead of the originally forecast 110m. The company also over estimated expectations of profits two years ago.

By Penny Leese