Meanwhile, Germany's Securities Trading Supervisory Office confirmed Friday that it is investigating alleged insider trading in Escom shares. The regulator said it had noticed a suspicious surge in the number of Escom shares traded, and a plunge in the stock's price, in the weeks preceding the company's announcement last Wednesday.

"The turnover seen was very suspicious in comparison with previous levels," Anke Reeh-Schild, a spokeswoman for the office, said in response to an inquiry from Reuter News Service.

Volume Jumps Ninefold

She said that in the three weeks before Escom's announcement, volume in its shares had risen eight or ninefold from previous average levels.

"The probe could take a few months," Ms. Reeh-Schild said. "At the moment it is a routine investigation against persons unknown." Escom could not be reached for comment.

Separately, an Escom spokeswoman told the Associated Press that Chairman Helmut Jost is planning on a 1997 payroll of 2,500 European employees, 43% less than current staffing.

In Germany, as many as a dozen of Escom's 130 stores could be closed, said Marc Ullrich, head of the Escom Computervertriebs-GmbH subsidiary. Escom has more than 450 stores across Europe and earlier this month announced it was closing 65 of its 235 U.K. branches.

The company, Europe's second-largest computer retailer, with an estimated 2.35 billion marks ($1.55 billion) in sales last year, filed for creditor protection to save it from bankruptcy after a new estimate put its 1995 losses at 180 million marks, up from a March forecast of 125 million marks.

Ms. Reeh-Schild said the insider-trading investigation would first center on electronically analyzing transaction volumes and price movements. Then banks would be asked for the names and addresses of customers on whose behalf the shares had been traded.

Generally Illiquid

Between June 3 and July 2, the day before Escom made its announcement, the company's share price slumped 49% to 4.63 marks from 9.15 marks. It ended trading Friday at 2.85 marks.

A total of 105,128 Escom shares were traded on June 3, and in the following weeks volumes in the generally illiquid share surged, reaching more than one million shares on several days.