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Scam probe nears end

KPMG and Linklater inquiry into Interserve's accounts to finish soon at a cost of £5 million

INTERSERVE chief executive Adrian Ringrose expects the £5 million probe into an accounting scam at the firm to be wrapped up in a few weeks.

The two-month examination of the business has been carried out by 60 investigators from accountant KPMG and law firm Linklaters and has involved 10 man years of effort.

The company said loss-making contracts and profits at the industrial services division, which mainly looks after petrochemical complexes, power stations and food processing plants, had been overstated by £25.9 million since 2000.

Six managers have been suspended since August, although Mr Ringrose said the investigation had not found any evidence that anyone gained personally.

He added: 'The people removed are the controlling minds. It would be inappropriate to speculate on the motives behind this. I can't explain the actions of others. It's not a position any business would want to find themselves in.'

The authorities have not been called in yet but Mr Ringrose said: 'The police aren't involved at this stage but, if there is evidence of criminal activity, that will become part of the investigation.

'We have to wait for the conclusion of the investigation.

These six are suspended and we may or may not take further steps.'

Pre-tax profits in the half year to June were ahead of expectations at £23.1 million against a restated figure of £14.1 million.

Revenue stood at £649 million, up 7 per cent.

Mr Ringrose said its involvement in Olympics-related work would be limited to its formwork and falsework operations.

He added: 'We are involved in some of the associated infrastructure, such as a desalination plant at Beckton, but the Olympics for us are more of an opportunity for our construction equipment business.'

Just under two thirds of Interserve's workload is facilities management, which Mr Ringrose said was still underdeveloped with a host of public services yet to outsource operations such as cleaning and security.