US gossip dims Scottish Power

SCOTTISH Power shares crashed 30 1/2p to 342p in huge volumes shortly before the market closed yesterday, as bear raiders created havoc.

Rumours swirled of accounting problems at its US operations. Scottish Power took the unusual step of emphatically denying any problems.

'We are aware of the rumours and we can say that they are totally unfounded. Trading is in line with expectations,' it said.

Bear raiders profit by selling shares they do not own, driving down the price, then buying them back cheaply. Companies with complex accounts are at risk in a market where confidencehas been hammered by scandals. Scottish Power's accounts are a happy hunting ground for bears. It has liabilities in the energy derivatives market valued at £6.8bn, or nine times its operating profits.

Its US operation, PacifiCorp, is exposed to the energy trading market, in turmoil since the collapse of Enron.

SP's credibility has been weakened by operational problems in America and its recent admission that dividends must fall. The shares have virtually halved since 1999.