A leading institutional shareholder in Powerscreen International has called for compensation to be considered for investors if reports that the company moved to raise prices at its troubled Matbro subsidiary more than two weeks before a share issue last December are true.

"If the company or its officers were in possession of information that was not generally available, which, if it were, would be likely to materially affect the price, then we would hope that the people responsible or the Stock Exchange should investigate the matter and examine the method of making recompense to those who were involved in that placing," Mr Des Doran, director of investment for Ireland at Standard Life, told RTE Radio.

The £18 million sterling (£22 million) share placing took place just weeks before the disclosure of a £47 million black hole in Powerscreen's Matbro subsidiary.

Powerscreen's executive management said at the time of January's announcement about the losses that they had been unaware of the problems at Matbro before the share issue in mid-December.

But a report in yesterday's Financial Times claims Matbro sales staff were told by their new managing director at a meeting on December 1st that their prices were uneconomic. The report said staff were told to withdraw prices already agreed with customers.

Institutions which subscribed for shares at a price of 625p sterling in December have seen the value of those shares fall to 203p sterling at yesterday's close.