Fraud at DRC subsidiary dents profit

FRAUD and mismanagement at Bell Equipment’s Democratic Republic of Congo (DRC) subsidiary has dented the financial performance of the listed manufacturer of heavy equipment for the construction and mining sectors in the six months to June more than initially estimated. Bell Equipment said on Friday that after further investigations into the fraud and mismanagement in the company’s subsidiary in the DRC, it now expected the company’s headline earnings a share for the six months to June to be between 32 percent and 39 percent lower than the previous corresponding period. The group said last month that it expected its headline earnings a share for this reporting period to be at least 20 percent lower than the prior period. This now equates to headline earnings a share of between 65 cents and 69c instead of the previously advised 80c compared with 101c in the previous corresponding period. Bell Equipment said on Friday that if the impact of the findings in the company’s subsidiary in the DRC were excluded, the expected earnings a share and headline earnings a share would both have been higher than that reported in the prior period. The company said last month that it had dismissed the entire management team of its subsidiary in the DRC plus a number of employees due to fraud and an independent forensic investigation was still in progress. – Roy Cokayne

TEGETA