Inquiry over Courage loan to Allied Leisure

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Lawyers are investigating how a pounds 500,000 trade loan from Courage, the brewing company, was booked as a profit by Allied Leisure, the nightclubs and tenpin bowling company, in the year to July 1993, writes John Shepherd.

The investigation comes three months after Allied announced it was in breach of banking covenants after a pounds 16m loss for the six months to January. Richard Carr, the company's founding chief executive, resigned.

The 1992/93 accounts were audited by Stoy Hayward. Adrian Martin, managing partner at Stoy, said: 'We will review the situation with Allied's management in the course of the next audit.'

Duncan Moss, who left as finance director in October 1993, has been assisting Ashurst Morris Crisp, the law firm, with the investigation. Courage said the loan was a normal trade transaction.

Damien Harte, who replaced Mr Moss, said: 'I couldn't say when the investigation will finish. The lawyers are moving forward as fast as they can. It is taking time because of the numerous parties involved.'

Allied will make an exceptional charge of pounds 500,000 in the year to this July. 'Had this been recognised in the 1992/93 accounts it would have reduced profit after tax and shareholders' funds by pounds 335,000,' Mr Harte said. In that year Allied reported a pre-tax profit of pounds 2.9m, against a loss of pounds 1.36m in 1991/92.

Allied is still negotiating a refinancing with its banks and is looking to make disposals. A freeze on capital repayments to lenders has been extended from tomorrow's deadline to 19 September.