Cops probe £500k hole in reseller's books

Police are investigating financial irregularities that Accumuli management discovered in the books of Boxing Orange, a managed security services provider it acquired for £5.48m last spring.

LSE-listed Accumuli confirmed today that while integrating the business into its fold, a review of the internal financial control system and the acquisition balance sheet had highlighted a £500,000 hole.

"Anomalies were found in the balances for accruals and deferred income in the acquisition balance sheet," said Ian Winn, finance director at Accumuli.

This led "to the suspension, and ultimately the dismissal, of the financial controller of Boxing Orange in June", he added. "The matter is now the subject of an ongoing police investigation."

The irregularities found relate to the years prior to the acquisition, pertaining to services that were invoiced but not delivered or accrued.

"The impact of these anomalies is that liabilities were understated in the acquisition balance sheet by £500,000. This impact will be reflected in the carrying value of goodwill in the group accounts," said Winn.

As a result, Accumuli has re-negotiated the deferred consideration payable to Boxing Orange's management from £2.1m to £1.3m.

Accumuli said that no net financial loss was suffered following the acquisition and the balance sheet hole did not impact the trading of either organisation.

Basingstoke-based Accumuli has already acquired Tuscany Networks and Fujin Technology as part of its 'buy and build' strategy. ®