THE BOSS of Speedy Hire has quit and a divisional finance director has been suspended after accounting irregularities were discovered in the UK rental group’s international division.
Shares in the small-cap business dropped by 15% to 54.5p after it uncovered the mis-statement of a number of accounting balances and revealed that certain control processes within its Gulf-based international business had been “repeatedly and deliberately circumvented”.
In response to these issues, which the company expects to cost around £4.5m and £5m, group chief executive Steve Corcoran announced his resignation after 26 years with the business, the FD of the international business has been suspended with other senior divisional management subject to further investigation.
“Given these events, Steve Corcoran believes it is appropriate that he resigns as group chief executive, will be stepping down from the board of Speedy Hire and will be leaving the company at a date to be finalise,” it said in a statement to the stock exchange.
The company said that, based on current information available, the mis-statements are isolated to the international division, which accounts for around 5% of its revenues, and are not expected to have a material impact on cash.
Speedy said it remains in compliance with the financial covenants under the group’s banking facilities but had breached certain other terms and is speaking with its lenders.
Addleshaw Goddard has been appointed to conduct an independent legal investigation.