Shares in food group Greencore tumbled by 15% in Dublin today after it said an internal audit had uncovered serious fraud of a significant scale at its Scottish mineral water division.
The financial impact of the fraud will result in a reduction in Greencore's overall operating profit in the current year by €9m. The company will also have to restate its accounts for 2006 to lower profits by €4m, and for 2007 by €8m.
At this stage the company says this does not seem to be a case of embezzlement, but a deliberate mis-statement of accounts.
Greencore said concerns were first expressed to management on June 6 after an internal audit review, leading to an investigation. The company said this indicated that the concealment of costs involved an individual in the mineral water business who left before the issues were discovered.
It said the three managers the direct responsibility for this individual had now left the business. 'The group is taking legal advice on what, if any, elements of this financial impact can be recovered', a statement said. Greencore said that while it believed this was an isolated incident, it was carrying out a 'thorough review' of all its businesses.
Greencore shares closed down 37 cent at €2.09 in Dublin.
