PracticeConsultingFSA investigates £74m error at Wiggins

FSA investigates £74m error at Wiggins

The Financial Services Authority is understood to be investigating whether airport and property management company Wiggins misled investors by reporting combined profits of nearly £50m between 1995 and 2000.

The FSA investigation, which is believed to be at an early stage, followed a reissue of Wiggins accounts on 8 March 2001 after the company was threatened with legal action from the Financial Reporting Review Panel, the Financial Times reported today.

The FSA probe has increased the number of ongoing inquiries at Wiggins to three. Last week, Accountancy Age reported CIMA was investigating the performance of member Geoff Lansbury, the FD at Wiggins, while company auditors HLB Kidsons may face disciplinary action from the ICAEW, which is studying the FRRP’s findings.

Initially, the company declared profits of Pounds 48.9m for the six-year period, but revised this to a loss of Pounds 25.2m, a net change of Pounds 74.1m. This meant Wiggins incurred losses for each of the last six accounting periods instead of profits, as were originally reported.

Speaking at the time of the reissue, Richard Sykes QC, chairman of the FRRP, said investors should be able to rely on Wiggins’ published accounts, but could not because of accounting errors.

A preliminary FRRP investigation looked at the 1999 accounting treatment of costs incurred in connection with PlaneStation project, a large-scale airport network operation, and revenue recognition in respect of the sales of certain commercial properties. This was extended to include year-end accounts from 1996 to 2000. The directors also decided to restate accounts for year-end March 1995.

The company’s share price was last quoted at Pounds 22.88, down 11.6% on Friday’s close.

Links

Wiggins FD faces disciplinary action

Wiggins forced to restate accounts

Wiggins Group plc

FSA online

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