UK engineering group finds £6m hole
Accounting irregularities at an American division of Charter, the listed engineering group, could hit profits by as much as £6m.
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News of the irregularities sent the company’s share price into free fall today as it tumbled 55% to 36p.
In a statement to the London Stock Exchange, Charter said it had become aware of irregularities affecting one of its business units within its air and gas handling business based in North America.
As a result, underlying profits at Charter for 2002 could be £6m lower than expected, while financial results for previous years may also be overstated by £4m.
Before this announcement, analysts had forecast pre-tax profits at Charter at around £24m for 2002.
The company has sent a team over to North America to investigate the matter, while a number of employees have been suspended pending further enquiries.
‘The investigating team has, at this stage, found no evidence of misappropriation of assets and believes that the irregularities are confined to one business unit and have no wider consequence for the integrity of the Group’s financial statements,’ Charter said.
The company is audited by PricewaterhouseCoopers.