Mysquar warns of collapse as £900,000 goes missing

APP MAKER Mysquar has warned investors that it may fall into administration after an inquiry into its accounts revealed about £900,000 was paid out to third parties or former directors without prior approval from the board or remuneration committee.

The Burma-focused company, which develops children’s games, said two non-executive directors were investigating the use of proceeds from the issue of £2.11m convertible bonds announced on in March, and £2.22m convertible bonds announced in June, when the discovery was made.

The Aim-listed company is now considering its options for the recovery of the missing funds and has already made staff redundancies to conserve cash.

Though the firm continues to trade, it cautioned that the “ongoing viability” depends on “urgent external funding” to meet requirements. It confirmed a rescue deal was being discussed with a creditor but there was “no guarantee that funding will be forthcoming”.

Shares remain suspended on London’s junior market pending clarification of the company’s financial condition.

The news comes just days after Piers Pottinger, former boss of collapsed public relations firm Bell Pottinger, resigned as chairman and director of Mysquar with immediate effect.

He had been leading the inquiry into the financial irregularities, but according to reports told the company that others were better placed to find out what went wrong.

In a separate announcement, SP Angel Corporate Finance resigned as the company’s nominated adviser (Nomad) and joint broker. In accordance with Aim rules, failure to appoint a replacement Nomad within a month will result in the company being delisted from the stock market.

A further announcement will be made as soon as there are any further developments.