Business - Irregularities behind SEP suspension

Accounting irregularities have been blamed for the suspension of SEP Industrial Holdings’ shares last week.

Trading in the Surrey-based manufacturer’s shares was halted under stock exchange rules which require publication of company results within six months of the year end. Trading has been suspended pending the release of SEP’s results for the year to 30 September 1998.

An SEP spokesman said the results had failed to emerge due to ‘substantial inaccuracies’ in financial information which had been submitted to the board. Forensic accountants are now investigating the irregularities which are thought to stem from consolidation of accounts for the group’s subsidiaries.

Discrepancies dating back several years are understood to have been discovered which relate to trading between the subsidiaries.

Difficulties at SEP emerged following the collapse of Quintech, a software subsidiary which went into receivership last November. SEP had planned to float off Quintech, taking advantage of last year’s boom in hi-tech stocks. When the business failed, finance director Paul Curson resigned.

Curson, who still holds a substantial shareholding in the company, said he was ‘surprised’ by the revelations. As Accountancy Age went to press, he was due to meet Ian Boyd, his successor, in an attempt to discover what went wrong.

Conservative party defence spokesman John Maples – a former SEP director and member of the company’s audit committee – was said to be ‘horrified’ by the suspension.

SEP shares, 30p a year ago, have been suspended at 10.25p.