Andersen to investigate Symonds arm

Click to follow
Symonds yesterday called in Arthur Andersen, the chartered accountancy firm, to investigate what appears to be significant breaches of internal controls at its precision engineering division.

The company said that Ken Garner, managing director of the division, had been dismissed and had been replaced by Patrick Curren.

The further raft of bad news, which followed a profit warning last month that led to a sharp revision of brokers' forecasts, sent shares in Symonds, which have been in virtual freefall since last autumn, plunging from 47p to 38p. Symonds now expects group pre-tax profits for the first quarter of this year to be even lower that it predicted in its trading update last month.

The decision to call in Arthur Andersen was taken after the company had conducted a thorough internal management review. A spokesman for Symonds said yesterday: "The directors believe that the management accounts for the precision engineering division do not accurately reflect the performance of the division for the first quarter of 1997."

Arthur Andersen will submit a detailed report on its investigation to the board towards the middle of next month.

Besides investigating and quantifying the effect of the breaches, the accountancy firm will also make a report on the financial records, internal controls and reporting of the division.

Mr Curren, who is taking charge of the precision engineering operations, only joined the company just over a fortnight ago on 4 April, having worked for Burnfield for the past six years.

A strong hint that something was wrong on the precision engineering side was made last month when Symonds warned that results for the year to the end of March would fall short of analysts' expectations, due to order shortfalls at the division as well as in process technology.

That warning prompted Greig Middleton, the company's stockbroker, to cut its profit forecast from pounds 4.4m to pounds 3.7m. The actual results are due to be released in June.