According to reports in this morning’s Financial Times, PwC, the group’s receiver, will tell a meeting of creditors today that it will be able to collect £5m or less of the £100m of debts recorded in the accounts as owed to Versailles by customers.
The news will embarrass the big banks and the leading institutions that helped establish Versailles as a stock market success.
Versailles floated on the Alternative Investment Market in 1995 and grew to a market value of £630m by the time its shares were suspended in December after the accounting irregularities were discovered.
‘It was a bit of a shocker,’ one person close to the case told the FT. ‘There has been a misrepresentation of the business over a substantial period of time.’
PwC has concluded that Versailles was the victim of fraud, according to the FT. It issued a writ against Frederick Clough, finance director, alleging breach of fiduciary duty, deceit and conspiracy to defraud.
The group was placed in receivership in January, two days after the Serious Fraud Office announced it was launching an enquiry.
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