newspaper report that the European Union objected to a link between the British conglomerate and Anglo American.

The Wall Street Journal said the European Commission was set to rule that the South African company's controlling 28 percent stake did not comply with European anti-trust law.

Lonrho, owners of the Princess hotels in Bermuda, declined to comment, saying it was waiting for a statement for the EU, which remained equally silent.

The European Commission has until May 8 to reach a verdict. If it does indeed rule against Anglo, it could strip the company of its voting rights, one industry watcher said.

The Journal report is just the latest in a string of articles on what might happen to Lonrho, which is in the midst of a protracted overhaul.

The restructuring, laid out over a year ago but amended several times, provides for the sale of Lonrho's hotels business and the divestment of its trading operations. It would leave Lonrho with only the group's extensive mining operations.

But the hotel sale has yet to be completed after the first chain was sold in September and it is unclear how the trading business will be hived off.

Lonrho prefers a demerger, but does not rule out other options.

The split-up process has been covered extensively in the business press including speculation about who is hoping to buy the Princess hotel chain and what other businesses may be sold.

Despite speculation, few deals have emerged and the architect of Lonrho's break-up plan, German business tycoon Dieter Bock, resigned as chief executive in October. Bock's exit followed the sale of his Lonrho stake to Anglo American which is particularly interested in the company's mining operations.

But it is Anglo's potential grip on the world platinum market which sparked the European Commission's probe in December.

The Commission earlier blocked a merger of Lonrho's platinum interests with South Africa's other mining giant, Gencor Ltd . Gencor is appealing to the European Court of Justice.