€20m Fraud Sends Company Into Spiral

An internal audit at a major Irish food company has revealed a multi-million euro fraud running over the past three years, and has crushed the company's market value.

The fraud was uncovered at Greencore's Scottish mineral water division, Campsie, which it bought seven years ago.

Because of the fraud, Greencore's overall operating profit has been reduced by €9m for this financial year.

The company has seen its value spiral as the three-year fraud means it will also have to readjust its accounts for 2007 by €8m and for 2006 by €4m. The company's shares since the announcement have dropped by 18%.

At this stage, the company said it appears the monies relate to a deliberate mis-statement of costs and not embezzlement.

A spokesman for Greencore said: "The investigation indicates that this concealment of costs was undertaken by the former financial controller of the Mineral Water business who left the business prior to the concealment being uncovered.

"The three managers with direct supervisory responsibility for the former financial controller have left the business."

The company have also recruited a new finance director for the business, and is taking legal advice in an effort to recoup some of their losses.

(DW)