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Business News

Charter suspends staff after finding £6m hole in accounts

The engineering company Charter has suspended three employees after uncovering an accounting black hole affecting its 2002 financial figures as well as the financial results of previous years.

The accounting irregularities concern one of its business units within its air and gas handling business in the US and could mean that the company's total underlying operating profits for 2002 will be about £6m below management's expectations.

In addition, Charter said that its reported financial results for an unspecified number of prior years may also have been overstated to the tune of about £4m in total.

As a result, three employees, including two in the US unit's finance department and one in general management, have been suspended pending further enquiries.

The black hole emerged after the company carried out its annual review of its financial results, due to be published in early March. Its auditors are PricewaterhouseCoopers.

Charter said yesterday that its chairman had ordered an investigation into the matter and a team had been sent to North America to assess "the nature and scale" of the irregularities.

"The investigating team has ... found no evidence of misappropriation of assets and believes that the irregularities are confined to one business unit and have no wider consequence for the integrity of the group's financial statements," it said.

Prior to the alert, its house broker ABN Amro had forecast Charter to turn out a pre-tax profit of about £24m for 2002.