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CompaniesSerious Fraud Office launches investigation of Torex
The UK's Serious Fraud Office (SFO) has launched an investigation into Torex Retail, carrying out searches at three residential addresses.
Following this announcement, Christopher Moore stepped down as chairman and Neil Mitchell as chief executive. Both will remain on the board. Day-to-day management will be carried out by a four member committee which is being chaired by the senior non-executive director, Geoffrey Forster, and includes finance director, Marcus Leek.
The SFO investigation came after the AIM-listed software company had issued a profits warning and suspended its shares pending further clarification of its accounts. Torex revealed that as a consequence of contracts being deferred from 2006 to 2007, its borrowings at the end of the year were around £23m higher than expected.
James Harding, The Times Business editor (31 January), suggested that as the SFO is not known for its lightning reactions, the issues under investigation may well be historic. Torex has been through three finance directors and four chief executives in three years, said Harding, adding that though recent criticisms of AIM’s listing standards by John Thain, New York Stock Exchange chief executive, were motivated by one-upmanship, Torex is hardly an advertisement for the London market.
Daily Mail city editor Alex Brummer came to a similar verdict, calling Torex the latest in a long line of British software companies to exhibit an offhand approach to book keeping. The London Stock Exchange risks damaging its reputation unless it tightens requirements, he warned.
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February, 2007 |
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