| Carter & Carter launches fraud probe |
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| Sunday, 02 December 2007 | |
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Troubled training firm Carter & Carter is investigating irregularities in its 2007 accounts.
UPDATE: Carter & Carter into administration The firm is a major provider of government-funded vocational training and outsourced services to large corporate organisations and SMEs. It has an extensive client list across a wide range of UK and global industry sectors, including retail, manufacturing and sport. On 2 October 2007 the firm asked for the trading of its ordinary shares to be suspended with immediate effect pending clarification of its financial position. Carter & Carter said that it has been working with its auditors, PricewaterhouseCoopers, to resolve issues identified during the audit of the results for the year ended 31 July 2007. It added that it has in particular been assessing the recoverability of certain current assets as at 31 July 2007 and has been reviewing the accuracy of certain other revenue streams in the business. Funding claims Carter & Carter Group PLC (LSE:CART) is currently £131 million in debt, a sum the board said is “likely to be higher than the current performance of the business is able to support”. It is locked in negotiations with the Learning and Skills Council (LSC) and banks to secure ongoing support. The group's chief executive and founder Phillip Carter died in a helicopter crash in May. Group director of business development Peter Marples and finance director John Green both resigned with immediate effect in October, after trading in the group's shares was suspended. A number of divisional managers have also left the company. Rodney Westhead became acting chief executive as the group searches for a permanent replacement. Carter & Carter's share price fell from around £12 before Carter's death to 82 pence when share trading was suspended in October. The group issued three profit warnings in October and is currently valued at £34 million. Falsification The board said in a statement that it had become aware that the quality of some apprentice learner records has been insufficient to support funding claims made to the Learning and Skills Council (LSC). The work carried out on behalf of the board also revealed deficiencies in relation to the learner records at the group's skills division, including the falsification of certain supporting documentation. Carter & Carter said that it currently understands those issues are restricted to a programme in the North East Skills business, which is in the process of being closed down. The group said it is conducting a full review of the company's financial and reporting procedures as it tries to get to the bottom of the problems. Unable to publish preliminary results The company has disclosed its preliminary findings to the LSC and to other relevant regulatory authorities, and said is co-operating fully with the LSC in determining an accurate position. The group's other businesses, Employability, Outsource Services, CBE, Quantica Training and NTP, are trading as normal. Carter & Carter said that it remains unable to complete the audit of its results for the year ended 31 July 2007 and, therefore, will be unable to publish its preliminary results for the year ended 31 July 2007. The Disclosure and Transparency Rules require publication within four months of its year end. The company said that trading in its shares will remain suspended until the results are published. Carter & Carter said that in order to strengthen the management function of the group an interim management team has been appointed to assist with the restructuring of the group, along with a number of additional senior finance staff. The group said that the present uncertainty is impacting on current trading. The board gave assurance that it is in the process of implementing systems and controls to eradicate inaccurate or incomplete record keeping from the business “at the earliest opportunity”. Related articles Related links |
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