BAKER TILLY has resigned as auditor of listed property developers Safeland after an "unmanageable conflict of interest" arose.
Within a Safeland statement to the stock exchange, the firm said: "The reason for the cessation of audit appointment was that following the identification by the directors of an alleged defalcation, an unmanageable conflict of interest has arisen, which has led to our resignation."
Two weeks ago, Safeland found it had suffered a series of fraudulent transactions, to the tune of £1.25m. Approximately £740,000 relates to the accounting period prior to 31 March 2012. It has already recovered £200,000 and "arrangements are in place" to recover a further £500,000 by the end of the current financial year.
The Chambers Dictionary describes ‘defalcation' as: "a misappropriation of funds entrusted to someone".
Baker Tilly said "it was inapropriate to comment" further on the stock exchange statement.
Safeland managing director Larry Lipman is currently on holiday and cannot be contacted for comment, according to a representative of the company.
It is not known who will replace Baker Tilly as auditor.
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