£3.9m accounting black hole at black cab manufacturer

by Rachael Singh

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15 Aug 2012

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THE MANUFACTURER of black cabs has blamed its recently unveiled accounting errors on IT issues.

Manganese Bronze estimates it has a £3.9m accounting black hole, which it attributes to technology issues.

The company said its IT system failed to log a number of transactions and invoices from a previous system had not transferred into the new software.

Subsequently, the company over-stated stock and under-stated its liabilities. It announced this week that it will delay the release of unaudited half-year results for the six months ended 30 June 2012, because it would have to restate prior years' financial results.

Manganese Bronze introduced the IT systems in August 2010 to manage its increasingly complex global supply chain.

A statement said: "Due to a combination of system and procedural errors, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly assessed through the new IT system.

"This problem led to the over-statement of stock and under-statement of liabilities in the financial statements of historical losses which go back over several years, although the work to apportion the loss between previous years is not yet complete."

The company added it continues to trade at a loss and the first seven months of the year have been difficult.

Finance director Peter Johansen joined the company at the end of last year to strengthen the company's working relationship with its Beijing-based shareholder and business partner Geely.

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