The company is seeking a new finance director, and hasappointed independent accountants to look into possible accounting irregularities. The appointment of Baker Tilly on 3 December resulted in the decision to suspend the shares last Wednesday. The moves will come too late to prevent a collapse in the share price when they are relisted. Teather & Greenwood, a joint financial adviser to Versailles, resigned last week in protest at not having been informed about the official inquiries. The DTI first raised concerns about the company's accounting policies in May, and last requested information in September. Its enquiries have been carried out under section 447 of the Companies Act, which allows inspectors to look at company documents.
Mr Cushnie sold 6 per cent of his 59 per cent controlling stake in the company for nearly pounds 30m in a share placing on 9 November. He said he had no knowledge of the accounting problems when he sold the shares, and the company broker had no knowledge of the DTI's involvement when it advised Mr Cushnie to reduce his stake. The problems will hammer the value of Mr Cushnie's holding in Versailles, which was estimated at pounds 335m before the suspension.
Mr Cushnie is the only black chief executive of a FTSE350 company. Profits have grown more than 50 per cent a year for the past three years. The company specialises in trade finance for small companies.