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Accounting worries hit Kwik-Fit sale

Kwik-Fit employs some 12,000 people
Another accounting worry has emerged at a leading
UK company.

According to the Financial Times newspaper,
accounting irregularities have emerged at the
tyre-fitting company Kwik-Fit as auditors prepared it
for sale.

Ford Motor Company bought Kwik-Fit in 1999 for £1bn
($1.6bn), but is now expected to receive just £300m
for the sale - well below the £800m it once expected.

The problems came to light when accountants
PriceWaterhouseCoopers, investigating the company's
finances, found that goods from suppliers were not
being charged against profits because invoices had
not been sent.

The effect was to understate liabilities and boost
profits by around £3.4m.

Worries mount

The problems first came to light in December when
Ford asked the accountants for a full investigation, and
the losses relate to the financial year ending 31
December 2001.

Sir Tom Farmer, who founded the company in 1971,
was said to be unaware of the problems.

Ford is facing big financial problems in the United
States after announcing losses of $5bn in the last
financial year, and cutting thousands of jobs.

Ford has already taken a loss of $700m in its last set
of accounts on the potential sale of Kwik-Fit.

It was hoping to sell the company to a private equity
firm, and potential bidders included Apax and CVC.

Kwik-Fit is the UK's largest independent car-repair
firm, with 1,900 branches.

Its value has also been affected by decline in the
European car repair market as the economic
slowdown continues to bite.

But the revelations are bound to add to concerns that
the accounting scandals in the United States relating
to WorldCom and Enron may spread to the UK.

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