WorldSpreads finance scandal hits City

A scandal erupted at the City spread betting house WorldSpreads yesterday, when the firm admitted it is "currently unable" to assess its own finances.

Shares in the AIM-listed outfit were suspended at 37p after "a review of the firm's financial position" that uncovered "possible financial irregularities".

The move comes just days after the chief executive and major shareholder Conor Foley abruptly quit for reasons not explained on Wednesday. The chief financial officer Niall O'Kelly also left after an earlier profit warning admitting to "an unusual pattern of client trading".

The chairman Lindsay McNeile insisted to The Independent on Thursday that there were no financial issues facing the group. He said Mr Foley moved on because he was "entrepreneurial" and had other ideas to pursue.

The co-founder of Sporting Index, Mr McNeile is a well-liked City figure, regarded as charming company. However, he is now under pressure to explain what happened at the firm he heads.

Mr Foley, the co-founder of the firm, is a loquacious, Irish businessman and former City trader. He was twice "short listed by Ernst & Young for Entrepreneur of the Year in Ireland" notes the company website.

The statement to the Stock Exchange said: "Whilst the group and its advisers investigate, WorldSpreads has requested a suspension of its shares from trading pending its findings and clarification of the group's financial position."

The company added that it was "taking on no more trades while management identifies the Group's financial position. The possible irregularity became clear within a day of the departure of Niall O'Kelly and new management's review of the finance department".