Compass has won damages from stockbroker Panmure Gordon over its claims last year that the caterer bugged supplier meetings.
Panmure Gordon has retracted the assertion made by analyst Mike Murphy in a briefing note last November, which claimed Compass had bugged meetings to gain an advantage when negotiating product prices with suppliers.
A statement, issued by both parties after they reached a settlement for an undisclosed sum, said:
"Panmure Gordon wish to make it absolutely crystal clear that there is no evidence which suggests that Compass has engaged in any secret bugging of suppliers' conversations."
Although Panmure Gordon chief executive Tim Linacre has said he stands fully behind the statement, he has also given his complete backing to analyst Murphy.
A spokesman for the stockbroker added: "Murphy has our full backing. As far as we're concerned this draws a line under the episode."
The stockbroker will pay Compass's damages and legal costs to a charity nominated by the caterer.
By Chris Druce
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