`Accounting irregularity' triggers Versailles suspension
Thursday 09 December 1999
The company said there was a preliminary indication that its accounting treatment may not comply with FRS5. Independent accountants have been appointed to conduct an investigation.
Versailles provides finance to small companies which lack the balance sheet to buy raw materials or satisfy orders from their customers. Versailles typically charges around 20 per cent in commission and interest on the loan. The problem has arisen in the group's key materials purchase product which last year accounted for half of Versailles' turnover.
A spokesman for the company said the irregularities would mean its turnover figure would have to be substantially re-stated. Profits are not expected to be affected.
Versailles' auditors are Nunn Hayward of Gerrards Cross. No decision has been made on whether any action will be taken against them or against any Versailles employees.
Versailles shares have soared from 88p to 250p this year, valuing the company at pounds 640m. Its success has been built on a staff of just 51 workers.
Versailles usually deals with companies in the telecoms, toys, household furnishings and engineering sectors. In some cases, it funds orders for cash-strapped companies which wait months for payment by their customers.
The shares will remain suspended until the investigation has been completed.
The inquiry is being undertaken by accountants Baker Tilly and will be finished by 31 January.
Current analysts' forecasts are for profits of pounds 16.8m this year.
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