SFO launches accounting inquiry into Corporate Services

The Serious Fraud Office yesterday launched a criminal investigation into accounting irregularities at Corporate Services Group, the employment firm that owns the Blue Arrow agency.

The Serious Fraud Office yesterday launched a criminal investigation into accounting irregularities at Corporate Services Group, the employment firm that owns the Blue Arrow agency.

The SFO, in an announcement made after the Stock Market had closed, said it had been passed a report into the irregularities from the Department of Trade and Industry.

Corporate Services said: "The directors wish to make it clear that the Department of Trade and Industry report which prompted the [SFO] inquiry relates to historic accounting practices, under previous management."

Peter Owen was brought in as chief executive this year, in an attempt to turn the company around. The previous board left the company in the spring of last year, following the emergence of the irregularities and a series of profit warnings. Their departure also coincided with an unsuccessful hostile bid for the company from Michael Ashcroft, the controversial former Conservative Party Treasurer.

Corporate Services has had to restate its 1997 and 1998 accounts. It has also had to settle a series of legal claims, for transactions carried out under the previous management. Blue Arrow was involved in a high-profile scandal at the end of the 1980's, over a failed rights issue.