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SIG investigates staff after false profit uncovered

SIG has revealed its profit has been overstated by approximately £6.6m in recent years and is now investigating senior staff over the accounts.

The false reporting came to light after a whistle-blower made allegations about the material supplier’s accounting practices.

SIG’s auditor Deloitte assisted by KPMG carried out a “forensic review” of the company’s accounts and reported to the board on Wednesday that balances had been overstated, in some cases “intentionally”.

The company said “a number” of people had been suspended by SIG and were being investigated.

A spokesperson for SIG declined to reveal the identity of those involved or clarify how many people in total were being investigated.

The current CEO and FD are not being investigated.

Deloitte and KPMG’s investigation found profit was overstated for the year ending 31 December 2016 by up to £3.7m, when the group reported an operating loss of £91m, attributed to problems in its French roofing business.

A profit warning the company issued in November 2016 in the run-up to its full year results saw former boss Stuart Mitchell ”leave suddenly”.

Its profit for the half-year to 30 June 2017 was overstated by up to £2.5m on an operating loss of £2.2m.

Profit was also overstated by up £0.4m in some years before 2016, which Construction News understands covers the previous two years.

SIG said it would restate its profit for the years in question, but that underlying profit for the full-year ending 31 December 2017 would not be affected.

The board is also reviewing “malus and clawback provisions in relation to incentive payments” made to some workers in recent years.

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