The UK’s largest sandwich maker, Greencore, has axed three senior managers
after discovering £15.8m worth of accounting fraud.
The Irish food group revealed that expenses and other costs had been
deliberately concealed at the company’s Mineral Water Strathlomond premises in
Scotland, which led to a ‘material misstatement’ of financial performance for
the years 2006, 2007, and the current financial year.
‘The investigation indicates that this concealment of costs was undertaken by
the former financial controller of the Mineral Water business who left the
business prior to the concealment being uncovered. The three managers with
direct supervisory responsibility for the former financial controller have left
the business. A new managing director and acting finance director for the
Mineral Water business have been appointed,’ Greencore said in a statement.
Greencore’s board believes this to be an ‘isolated issue’. However it is
conducting a thorough review (independently supported by KPMG) of all the
Group’s businesses and of its internal control, financial reporting and external
The result of the fraud is expected to lead to a restatement reducing the
Group’s operating profit by €4m (£3.16m) for 2006 and by €8m (£6.33m) for 2007.
In addition, the estimated impact of this issue in 2008 will be a reduction of
operating profit of €9m (£7,12m).
The company added that since the issue was first identified, the Board made
it a priority to move quickly to determine the cause, extent and impact of the
It then took steps which included an immediate investigation following
meetings between the group finance and finance director at the Mineral Water
premises, analysis of the last three years of accounts and identification of the
The audit committee and board have also met to review the analysis and to
assess the situation.
The Group is taking legal advice on what, if any, elements of this financial
impact can be recovered.
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