FRRP probe slams IT recruiter

AIM-listed IT recruitment company Highams Systems Services has been forced by
the financial reporting watchdog to reduce the value of its net assets by almost
£200,000, after a probe into the group’s acquisition of RWP Recruitment Services

When Highams made the acquisition, the company reached a share purchase
agreement which was subject to the placing of new Highams shares. The company
allotted 3,967,936 shares to vendors as part of this deal.

The FRRP found that when the company made the allotment it valued its shares
at 12.47p per share in its accounts, but when the agreement was signed and
approved at the company’s AGM the share price had fallen to 7.25p per share.

The regulator said the lower price was the one that should have been used,
and told the company to restate its accounts to reflect the lower share

The directors accepted the ruling, and made the restatement. The effect of
this change was to reduce net assets by £195,000 and the loss for the financial
year by £12,000.

BDO Stoy Hayward, the auditors of Highams Systems Services, still have to
report on the numbers that were revised following the FRRP’s action.

A spokesman for the company would not comment on the FRRP’s findings.

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