Electrical firm Hastie's future 'bleak'

25 May 2012, 5:30 pm   -   Source: AAP

The future of electrical and refrigeration company Hastie Group is in doubt after an employee was found to have falsified financial statements.

The future of troubled electrical and refrigeration company Hastie Group is under threat after an employee admitted to falsifying company accounts.

The discovery is the latest in a string of bad news for the company.

Its shares were placed in a trading halt in April when its middle east joint venture hit trouble relating to a legal battle over payments for a major building project in Dubai.

Hastie announced earlier in May that its first half earnings would be reduced to zero from the $58 million forecast last year.

This followed two write-downs in November and a $150 million loss for the six months to December 31.

Chief executive Bill Wild, who was appointed in October to turn the company around, said Hastie was in talks with banks and new investors when the employee last week admitted to adjusting figures in order to meet profit forecasts.

Hastie's investigations to date have estimated that the accounting irregularities, which date back to the 2008/2009 financial year, will amount to a $20 million charge to profits for the current financial year.

"It could not have come at a worse time for us," he said.

"We've been trying to negotiate a deal with the banks and our new investors and they're very unhappy. It's thrown into doubt our ability to do a quick due diligence or due diligence in any reasonable time."

Mr Wild said the latest disparity has caused him and his executive team to reassess the future of Hastie, which supplies mechanical, electrical and refrigeration equipment to building companies.

"We're in the midst of re-evaluating, I guess you've got to say because it is now just so damaging," he said.

"We've lost so many suppliers. We've not so much lost our clients, they still acknowledge that Hastie does good work...but over the last few weeks our winning of work has just stopped and it's got to critical proportions over the last week."

The employee who admitted to altering figures has been suspended and Mr Wild said they had identified on Friday a second employee who was involved and would be dealt with.

Mr Wild said they also believed that some current and former senior management had participated in the irregularities.

However, he said so far it appears that no funds were misappropriated.

"There's no doubt that the culture here has been one of hiding bad news," he said.

The company had reported the incident to the Australian Securities and Investment Commission (ASIC) and was continuing its own inquiries.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube