Disaster recovery group Guardian IT and Irish security vendor Baltimore Technologies were yesterday dragged into the furore surrounding financial reporting, when both firms admitted to discrepancies in their accounts.
Following the collapse of energy giant Enron, company accounts have come under intense scrutiny. With both firms struggling of late, the latest admissions will be a body blow.
Guardian IT said that discrepancies in its financial accounts over the last two years would amount to £4m, and that it faced restructuring charges that could top £19m. The announcements increase doubts about the company's financial security.
Financial analysts have warned that Guardian IT is at risk of a hostile take over, or possibly bankruptcy. Chairman Richard Raworth has tended his resignation.
The company warned two months ago that it would miss sales targets for the year. It has cut 70 staff in an effort to save £3m, and talks with creditors are continuing.
Meanwhile, Baltimore revealed yesterday that its Japanese unit had overstated revenues by £1.06m. Having previously gone on an acquisition spree, it has subsequently been forced to sell off units to avert a cash crisis.
The company bought Content Technologies for £645m, which was sold off for £20.5m. A week ago, Baltimore announced a management buy out of the Japanese unit.
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