Three former directors of Corporate Services Group, the recruitment firm that owns the Blue Arrow employment business, have been charged with fraudulent trading following a Serious Fraud Office investigation.
The investigation into accounting irregularities at the company between 1997 and 1998 was conducted by the SFO and Leicestershire Constabulary. The three directors appeared at Leicester Magistrates court yesterday. They are John Abrahamson, Geoffrey Brailey and Roger Eden.
CSG said that the legal proceedings would have no material adverse impact on the company's financial position or current trading prospects.
"The directors of CSG wish to emphasise that the SFO's inquiry relates to historic accounting practices, under the previous management, which pre-date a radical reorganisation of the board and the appointment of Michael Davies as chairman in May 1999," the company said.
CSG posted an interim loss in September 2000 after £9m of exceptional charges relating to litigation settlements. The company said that it had become apparent in the preparation of the 1998 results that "certain accounting polices had been applied aggressively and in some cases there had been material errors".
In its annual report in 1999 the company said: "With regard to the UK business, it was clear that there was a significant operational issue in that the business had not been invoicing or collecting debts in a timely or appropriate manner." The 1997 and 1998 accounts were later restated.
CSG was the subject of a failed hostile takeover bid in 1999 from the entrepreneur Lord Ashcroft. Neither he nor the current CSG management have been part of the investigation, which started in September 2000.
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