Company admits it may have to bring in outside agencies, as strong results fuel rise in share price
The chief executive of Interserve has said that the police could be brought into its investigation into accounting irregularities at its industrial services divisions.
The support services company’s auditor and law firm have been conducting a review of the support services group in the wake of the accounting problems, which came to light last month.
Adrian Ringrose, the chief executive, said: “The evidential inquiry has a little further to run and should be completed in a matter of weeks. It is an internal investigation, but we may need to bring in outside agencies, depending on what we find out.”
Ringrose added that he did not expect any suspensions other than the six managers who are the subject of an internal investigation.
The news came as Interserve announced interim results last week, delayed by almost a month because of the investigation.
The company confirmed that it was forced to wipe £25.9m off its accounts because of accounting mis-statements at the industrial services division, although the figure was in line with Interserve’s predictions.
Lord Blackwell, the chairman, said the investigation showed “no evidence of any such irregularities in the accounts of our other divisions”.
Meanwhile, Interserve has posted a good set of financial results. Revenue for the six months to 30 June was £649.1m, compared with a restated figure for the same period in 2005 of £602.7m. Pre-tax profit rose from £14.1m to £23.1m, despite the £25.9m write-off.
The positive results and the confinement of accounting irregularities to one division was enough to reassure investors, and Interserve’s share price rose 18.6% to 370p.
The group first announced it had discovered accounting problems in August. The subsequent fall in Interserve’s share price resulted in some shareholders threatening legal action to obtain compensation for devalued shares. However, that threat has now been withdrawn.