French firm Spanghero on Friday rejected allegations that it had sold horsemeat in beef products but admitted "minor" negligence in a widening scandal of food industry across Europe.

"We were accused of fraud. I reject these accusations. We did not mislead anyone. We have placed an order for beef, having been led to believe we received beef, and having sold back what we thought was beef," Spanghero President Barthelemy Aguerre said.

"They found a few anomalies, but they are minor. Let's consider them as negligence but not fraud," he stressed.

Detailing an investigation into who are behind the scandal, French Consumer Affairs Minister Benoit Hamon on Thursday said the local domestic meat processing company had been suspected of knowingly selling horsemeat labeled as beef.

The company risks paying a fine of up to 187,500 euros (250,411 U.S. dollars) and a jail for key company executives.

As the government decided to withdraw Spanghero's operating license, Aguerre expressed hopes that investigators will show the company's innocence by Monday before it loses all its clients.

In France, the horsemeat affair erupted after frozen food group Findus unit in France last week recalled lasagne and two other products after discovering that they included up to 100 percent horsemeat from Romania rather than beef from France.

In mid-January, Irish food inspectors detected horsemeat in frozen beef burgers made by firms in Ireland and Britain and sold in supermarket chains including Tesco, Britain's top retailer.

So far, companies and slaughterhouses in a number of European countries, including the Netherlands, Switzerland, Germany, Luxembourg and Bulgaria, have been dragged into the scandal, media reports said.

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