Building and maintenance group Interserve faces up to a £25.9m hit in its asset valuation after its much-publicised accounting bungle
The company was left red-faced after irregularities in its industrial
services unit came to light, which led to the write-down.
After a review by KPMG and Linklaters, which will cost Interserve £5m, CEO
Adam Ringrose said there would be no further write-downs and the irregularities
had only affected the industrial services division.
Six senior managers of the department still face the prospect of disciplinary
action after the gaffe.
The mistakes related to the entering of invoices into the company’s
accounting system which were subsequently destroyed.
Interserve’s interim results, delayed after the accounting errors, showed a
pre-tax profit of £23.1m after the necessary adjustments were made, compared to
£14.1m last year.
When the accounting oversight was first disclosed, investors were furious to
see more than 20% wiped off the stock price as the shares plummeted by 75p.
Interserve appears to have weathered the storm as its share price rose
steeply after the revised figures were released.
Shareholders who had been mulling over legal action against the company
appeared to have been appeased by the investigation findings.
Firebrand Bob Morton, an Interserve shareholder, believed that any problems
could be resolved without having to resort to litigation.