City takeover panel is to probe CF loss
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THE CITY'S takeover panel is investigating the reasons behind Crane Fruehauf's pre-tax loss of £305,000 last year which followed a prediction of a £3m profit. The forecast was made in October last year when CF was fighting hard — unsuccessfully — against a takeover bid by the American-based Fruehauf Corporation which held a one-third stake.
Last week, when the loss was announced, CF's auditors, Coopers and Lybrand, registered displeasure about the company's accounting methods.
They said: "In arriving at the results shown in the consolidated profit and loss account, it has been found necessary to make significant adjustments to the results for the year as disclosed by internal management accounts.
"These adjustments include amounts resulting from accounting failures in the group, which are evidenced by qualifications in the audited reports of the following companies: (a) Dennison Trailers (Ireland), where the accoun ting records were not properly kept and accordingly stock shortages and other items amounting to about £450,000 could not be properly explained; (b) Crane Fruehauf Finance, where the company failed to control the accurate recording of transactions during the transfer of accounting and administrative functions to the present location.
"Consequently, in our opinion, proper accounting records have not been maintained throughout the group. Nevertheless, we have no reason to believe that the results shown in the accounts are not fairly stated."
Fruehauf has said that much of the loss was caused by an urgent need to clear up mis takes made by the old cc pany.
It has closed down an at tive Iranian operation, which stock which v "simply collecting rust", stock written down by Elm Part of the profit forec was also based on a plan have trailers assembled by ternational trading compi Inchcape at Lagos, in Nige This was abandoned af Inchcape's offer to take o CF was beaten by Fruehau: Fruehauf's own audit( Touche Ross, are to repl Coopers later this year.
In the United States, Fr haufs president and chairn are both appealing agai conviction of conspiracy defraud the Internal Revei Service.