£5m hole forces Speedy Hire's Corcoran to resign

Steve Corcoran, the man widely seen as being the driving force behind Speedy Hire’s growth, has been forced to resign after £5m in irregularities in its accounts were discovered – a situation which has led to it breaching terms with some of its lenders.

The markets have reacted in shock to the news of problems at the Clayton-le-Moors company, whose shares had fallen in value by 15.5% by lunchtime.

The companysays repeated and deliberate circumventing of controls has been discovered in the reporting of balances in its international division following management changes.

The impact of this is likely to be between £4.5m and £5m, while it expects to take a £3m knock in pre-tax profits for the year to the end of March next year. Its full-year figures for both 2013 and 2012 will also have to be restated.
The international business makes up 5% of group revenue, and the company insists that its key ZADCO and All Futtam Carillion contracts are not affected, nor is its joint venture in Kazakhstan.

It also insists that, while it has entered into a “constructive” dialogue with its lenders, it remains in compliance with its main group banking facilities.

Nevertheless, it has suspended the finance director of its international division while other senior management remain under investigation.

Law firm Addleshaw Goddard has been appointed to carry out a legal investigation, and forensic accountants are currently being appointed. Steve Corcoran will remain with the company until a new chief executive is appointed.

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