Suspension on Sierra Cables to continue

Wednesday, 4 June 2014 00:18 - - {{hitsCtrl.values.hits}}

Company promises further disclosure by next week

The Colombo Stock Exchange (CSE) is persisting with the suspension of trading of Sierra Cables PLC until the company comes up with full disclosure on an alleged fraud. Sierra Cables was suspended on 13 May after the company disclosed of significant misstatements in its financial statements for the years 2010/11, 2011/12, 2012/13 and 2013/14. This was pending a more definitive disclosure on the extent to which Sierra’s financial statements need rectification or adjustment. The preliminary report by KPMG indicated a discrepancy of around Rs. 172 million. The CSE said that taking into consideration the materiality of the disclosure and the possible impact to trading of the shares, the CSE suspended trading of SIRA from 13 May and has informed the company that the suspension will continue until SIRA’s audited financial statements are duly submitted to the CSE to be disseminated to the market. The CSE wants the SIRA Board of Directors to rectify the misstatements, correct the position certified by the external auditors and audited financial statements are re-stated with corrected balances. In response SIRA Chairman Priyantha Perera expressed regret inability to disclosure the corrected financial position and re-statement of financial statements. “We now anticipate that we would be in a position to make the required disclosure with the audited financial statements by 11 June 2014,” Perera said. He said the delay was due to circumstances beyond the company’s control. In its original filing to CSE, the company said the Board was informed of significant misstatements. Subsequent to suspicions raised, an inquiry was initiated and KPMG was required to give a preliminary report which indicated a discrepancy worth Rs. 172 million between the value of work in progress as reflected in the General Ledger of 31 March and amounted indicated by a physical verification. The Board was further informed by KPMG that it needs to conduct further investigations into other areas of relevance. “In the meantime, the Board is of the opinion that there could be other significant matters in the accounts especially in relation to the recording of stocks,” SIRA said. The Board also said it will vigorously take all requisite action against those responsible for any improprieties if revealed in the investigation.

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