IT recruitment specialist Corporate Services Group announced this week that its 1998 results would be delayed until the end of June while finance director David Lake and auditor Arthur Andersen conducted a further review of its budgets and accounting methods.
CSG is still formally subject to a takeover bid from New Carlisle, but the board filed a regulatory announcement on Tuesday explaining it would be unable to make a recommendation by the 28 May offer deadline because of uncertainty over its results for the year ending 31 December 1998.
The CSG board said that, early in the current year Lake, who joined the company last December, discovered material errors in the group’s accounts stemming from ‘aggressively applied’ accounting policies.
Although the review of its 1998 financial year is incomplete, the new board, which was appointed at an egm on 4 May, concluded that additional provisions will need to be made against 1998 profits.
The board said interim results announced on 6 August 1998 ‘may have materially overstated the Group’s profitability for that period’ and would also be subject to further review.
As part of the wider review, CSG has asked its lawyer Linklaters & Paines to examine the November 1998 sale of its training division after discovering letters that disclosed indemnities provided by CSG as part of the sale.
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