PracticeAuditInterserve board interrogated by shareholder

Interserve board interrogated by shareholder

Shareholder demands to know who is responsible for accounting irregularities in letters from his lawyer

A former Interserve shareholder has sent lawyer’s letters to the embattled
buildings maintenance company demanding more information about the accounting
irregularities reported earlier this month.

Six senior employees were suspended from the industrial services unit, where
the irregularities were discovered, and the company also announced it would
reduce its net asset value by ?25m.

The Financial Times reported that the letter, by law firm Mishcon de
Reya, contains a list of questions pertaining to when exactly the board
discovered the problems, why they were not detected earlier and how they arose.

Through his lawyers, shareholder Bob Morton also requested a copy of a report
from KPMG, who are currently conducting an inquiry into the irregularities,
independent of the company’s auditors Deloitte.

Morton, a former chairman of MacLellan – a rival services company purchased
by Interserve in July for ?118m – was also a large shareholder in MacLellan, and
has seen his shares in the company drop sharply after the announcement of the
irregularities, which appear to go back to 2001.

Morton told the paper he wanted to know ‘who is responsible’.

Interserve has postponed it’s results announcements, expected late September.

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