MAN suspends two Ell bosses
Page 6
If you've noticed an error in this article please click here to report it so we can fix it.
as finances are investigated
• by Cliff Caswell ERF has moved to allay customer fears after parent company MAN suspended two of its top executives for alleged financial irregularities.
Chief executive John Bryant and chief finance officer Klaus Wagner were suspended last week amid reports of a 16.3m discrepancy in the accounts.
ERF spokesman Trevor Longcroft confirms that an investigation is underway but insists it is business as usual: "There is no reason why anybody should be concerned."
Industry sources suggest that used truck sales and guaranteed buy-backs may be at the heart of the problem.
An MAN spokesman declined to confirm the figure or press reports speculating that problems include inflating the amount booked for trade credits to customers and depressing the real loan figures.
But the company does say: in spite of the group's risk management system being transferred step by step to the English subsidiary, the fact that the accounts of the company, which was acquired only last year, were incorrect, was not discovered for sev eral months.
"Earnings will not be affected by the losses due to the irregularities in the balance sheet, as these will be booked against MAN Group contingency reserves."
Accountants BCD Stoy Hayward started the financial investigation last Tuesday but a spokesman says this is likely to take "weeks rather than days". He reports that accountancy firm Deloitte & Touche took over from Ernst & Young as ERF's auditors when MAN bought the company last year. Cheshire-based ERF was acquired by MAN at the beginning of 2000 from Canadian Group Western Star, under which it had seen steady growth.
Last year ERF launched the ECX and the ECS, which are being built at a £28m stateof-the art truck assembly plant.
According to the Society of Motor Manufacturers and Traders, ERF registrations have more than doubled over the past three years. An SMMT spokesmai says the problems will be a "minor diver sion" and will not harm the firm in the long term. He adds: "We believe the curren problem is one of administration, and think it is unlikely that it will deflect a suc cessful firm from a successful course."
Stan Robinson, owner of Sta Robinson's (Stafford), who has just take delivery of five new ERFs, says: 'Thesi trucks are the right sort of price and an economical. The selling out value is maybi not as good as some others, but they are good acceptable vehicle."