Sodexho calls for investigation as broker's report hits shares

Sodexho Alliance, the world's second-largest caterer, is threatening legal action against Citigroup stockbroker Smith Barney following a report which it claims could have damaged its share price.

The French caterer has called on the French stock market regulator to investigate the 8% fall in its share price on 12 January, which it claimed was triggered by incorrect information included in the Smith Barney report.

Sodexho said the report, which alleged the caterer had used "receivables securitisation" to boost its working capital, was false. This is a process whereby a company accounts in advance for money that it is due to receive in the future.

The French caterer said the g100m (£69m) improvement it made in working capital in 2003 was due to operating activities and that it had the right to seek the "appropriate redress".

In a statement, Sodexho said: "The securitisation programme has been in place since 1999 as a financing source and, since this date, is disclosed in the accounts of our subsidiary according to local accounting principles."

Smith Barney admitted that its claim that securitisation had boosted Sodexho's accounts was incorrect, but the broker did not change its recommendation to sell the stock.