Torex rocked by £5m black hole in interims
Under-fire software company uncovers large error in interim accounts
Torex Retail has
been hit by another damaging scandal after its new management found further
accounting irregularities amounting to £5m.
The software company, which is being advised by
Deloitte
identified a discrepancy in its 2006 interim report which detailed a £5m
contract with Magdalen Consulting, run by Torex Retail’s former chairman Rob
Loosemore.
Torex received a £2.5m initial payment from Magdalen but is yet to receive
the £2.5m balance. To compound the issue, the initial payment was
included in its interim report to June 30 2006, but the payment was made in
July.
Torex, which is still under investigation by the
Serious Fraud Office the
FSA and the London Stock Exchange, has now decided that the risk of recovering
the balance is so significant that it has taken the entire £5m off its restated
accounts.
Further reading:
Torex problems may break its banking
covenants
Torex bailed out by Royal Bank of
Scotland
Torex Retail auditor earned large non-audit
fees