Institutional investors said efforts to boost the company’s shareering group Powerscreen was thrown into chaos this week, after a conflict of interest forced Price Waterhouse to withdraw from the inquiry, writes Phillip Inman. price could descend into farce unless a replacement for PW was found quickly.
PW was due to examine a report by Powerscreen auditor, KPMG, into alleged accounting irregularities. The report examines a #3m rights issue last December, a month after a #40m hole in the accounts of its materials handling division Matbro was discovered.
It also examines allegations that finance director Barry Cosgrove, a member of the Irish ICA, attended a meeting at Matbro weeks before the rights issue.
Powerscreen said in March that PW’s examination of the KPMG report would ‘give greater confidence to the review process’. This week PW would only say its conflict, discovered by Powerscreen’s solicitors Herbert Smith, was minor, but could be used to undermine the investigation.
A PW spokesman said it had not resigned because it had yet to sign a deal with the company, despite more than eight weeks of discussions.
One fund manager said there must be ‘no further delays before the report comes out and the board takes action.’