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Wednesday, April 28, 1999 Published at 11:06 GMT 12:06 UK


Business: The Company File

Carpet chief in accountancy scandal

Allied Carpets' profits have a threadbare look

The former head of the troubled carpet retailer Allied Carpets has been implicated in the accounting scandal that rocked the group.

Allied Carpets said it has evidence that Ray Nethercott, who resigned as managing director of the company on April 23, was aware of the accounting irregularities that were investigated last August.

This is in contrast to statements Mr Nethercott made to the board at the time, Allied Carpets said.

The company said it has therefore terminated Mr Nethercott's contract of employment without compensation.

He has already left the company but this development means any pay-off he may have expected will not be forthconing.

Allied Carpets pointed out that the new evidence does not alter the financial position of the company.

Chairman Julian Lee said: "It was important to explain the circumstances of Ray Nethercott's departure to shareholders as soon as possible. Now the company can put this matter behind it and look forward to making a fresh start."

Allied Carpets has had a terrible few years - with the accountancy scandal followed by plunging profits and failed takeover talks.

The accountancy problems related to its internal policy on the early recognition of sales. These sales were recorded before the goods were delivered. The problems wiped £3m off Allied Carpets' profits.

The group was also hit by a downturn in consumer confidence.



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