KPMG Investigating the £4m Loss

Lucas Gilmore, “Big 4″ observer
October 22, 2010 /

Cosalt has hired KPMG as accountants to examine a $4 million shortfall in the value of its stocks and also its work in progress.

Cosalt is a Scottish marine safety equipment provider.

This appointment of an external audit team to look into its records comes after an internal review into the operating practices that the firm followed in its Aberdeen-based offshore division. This is the division which reportedly supplies lifeboats and ropes to the oil and gas industry of the region.

When investigation began at the firm after a report in The Times, Calum Melville, who is the head of the unit and also one of Scotland’s richest businessmen, was suspended of his services to the company. Last month he left the company.

Cosalt said in a statement that the internal review had pointed out and identified “a series of doubtful transactions” which involved a supply company. According to the evidence that hss been unearthed, this accounts for a substantial portion of the shortfall at Cosalt.

Though Cosalt refuse to give any further information on the issue, The Times had reported that one of the issues that is under the scanner was that the firm had made payments for equipment that it did not receive.

A further detailed investigation is being carried on by the company to establish the extent to which the shortfall has occurred. The company believes that claims could arise about the potentially suspect transactions.

In a statement yesterday, Cosalt said the shortfall had not affected its service levels and that its banks had raised no concern and business is going on as usual. Cosalt is confident that the issues lie only with its Aberdeen-based offshore division and that its the business and its accounting procedures are normal.

 

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