Coal miner and merchant Hargreaves Services (HSP) has unearthed more trouble for shareholders after a serious overstatement of stock levels and credit notes was discovered within the group's Belgian subsidiary. These issues are a major blow as they are connected to the energy and commodities business, the company's largest profit contributor and fastest-growing division.
Two people with management contracts have been suspended immediately and accountancy firm KPMG will carry out a forensic investigation. This latest problem adds further woe after the shares crashed in May when problems emerged with mining operations at the company's Maltby pit.
The company says it has no reason to think the problem extends beyond Belgium and added that the problem division contributed £2m of the group's £150.6m full-year operating profits; the balance sheet write-off is estimated at £15m.
