PracticeConsultingKPMG probe £50m stock error at SSL

KPMG probe £50m stock error at SSL

Financial records at healthcare company SSL International are under scrutiny by a team of forensic accountants from KPMG after the discovery of a £50m stock error.

SSL International, the makers of Durex condoms and Marigold gloves, this week refused to say whether the ‘ongoing’ investigation would include scrutiny of the role of former finance director Paul Sanders, or Andersen, the company’s auditor.

The investigation started following an internal review of the company’s trading arrangements which found customers were holding Pounds 63m of excess stock, leading to a one-off loss of Pounds 50m in gross margins and manufacturing costs. This prompted KPMG’s investigation into errors in prior periods which has so far shown the company had overstated its sales and profits figures by about Pounds 25m each for the 25 months to 31 March 2000.

Unveiled last week, the findings of the investigations so far follow SSL’s move in February to invite former chief executive Iain Cater to step down as it signalled the ‘trade loading’ review.

This came just a week after new finance director Garry Watts was appointed to fill the position left by predecessor Paul Sanders, who left the company in December to become chief financial officer of Baltimore Technologies.

A company spokeswoman told Accountancy Age SSL’s accounts were ‘managed internally’ while SSL found a replacement.

Andersen, the company’s auditor, confirmed the ongoing investigation, but a spokeswoman said: ‘We have no comment at this time.’ Sanders also declined to comment. The company said it would give a fuller statement on the investigations on 5 June as it announces preliminary results, but emphasised it was confident the misstatements would not affect current trading.

Links

Condom company makes Pounds 50m error

SSL website

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