Doesnt look good.http://www.investegate.co.uk/Article.aspx?id=200911031234248...The preliminary results of the ongoing accounting and stock reconciliation investigations show that the stock valuation issue highlighted in the previous announcement is now broader than first thought. The issue appears to involve not only the accounting book value of stock but also in some instances physical quantities. The Board is also reviewing the accuracy of recent financial reports provided to its banks.andDiscussions with the Group's banks continue. In particular the Group is waiting to hear from its banks regarding the Group's ability to access credit and their ongoing financial support.
forgot to add this as well:The board is reviewing the positions of Rupert Lewin (Chief Executive), Hugh Bevan (Finance Director) and Martin Dodge (Chief Operating Officer).
Surely they have to go.They are either dodgy or incompetent.
Surely they have to go.They are either dodgy or incompetent. Or both.
Another poor state of affairs.It really is shocking that a company whose business is looking after stock cant even count or value the stock correctly - and the auditors too must have been asleep on the job.Without an accurate stock figure at the end of every accounting period any figures this company comes up are totally worthless.No doubt the FSA will sit twiddling their thumbs for another 12 months before opening up an investigation by which time it may be too late to help shareholders.
I agree.This situation is totally outrageous.It looks pretty clear that deloittes (the auditors) have made a right mess of this.80% of their audit should have been focused on making sure that the massive figures quoted on the balance sheet were accurate.Without that, everything else was worthless.They have not performed their role adequately & should be sued for punitive damages.
It really is shocking that a company whose business is looking after stock cant even count or value the stock correctly - and the auditors too must have been asleep on the job.Without an accurate stock figure at the end of every accounting period any figures this company comes up are totally worthless.It isn't just Aero Inventory who will be concerned about this.Aircraft maintenance has very strict rules about stock recording with each part having it's own tracking number and maintenance record (OK batch numbers for some small parts) because the age and previous history of individual parts is absolutely and totally critical to aeroplane safety.It is normal for stock control systems to be auditted by the CAA/FAA and if/when they get wind of this we could rightly see aircraft fleets grounded on safety grounds because the reliability of their parts looks as if it is being questioned. Whilst it looked like a simple valuation error it didn't look too serious, but it now raises much more serious questions, I think Aero Inventory will now have zero reputation in the industry and am sorry to say is probably history.
Swag MukerjiWhat sort of a name is that for a finance director?
Now the FD's gone.http://fool.uk-wire.com/cgi-bin/articles/200911031234248668B...MDW1954
I have had what looks like a lucky escape on these. I had a holding last year and was sitting on a nice profit at one point. But then they slid back along way with the market and the profit evaporated. I started selling around the beginning of the year when they announced they lost the deal they were working on. I then sold out completely (at a large loss) after the last results in March were showed very poor cash flow. Even after that, I still considered buying a few back recently but thankfully held off to see whether their cash flow would improve. Which now of course it won't.The lesson for me on this:Never invest in a share where the profits are not reconcilable against the cash flows.The other share I hold that has some concerns in this area is RCG. Again I am sitting on a profit but have started to stop slice in case the cash flow does not start to improve very soon. I will keep doing this on any price rises until i have my original stake back. But will scrutinise the next set of results carefully for signs of improving cash flow.It is nice to be able to post this here rather than on the Katastrophe board!I sincerely hope nobody was holding many of these. I doubt there will be much left to salvage from this wreck now.JL
I think Aero Inventory will now have zero reputation in the industry and am sorry to say is probably history. Aero Inventory have now been placed in administration:http://moneyextra.uk-wire.com/cgi-bin/articles/2009111112093...The reviews into the value of stock as well as the accuracy of recent financial reports provided to the banks referred to in the Company's announcement of 3 November 2009 have yet to be completed. These matters are now under the control of the joint administrators.Personally I feel that an incident like this should be a matter for Police investigation as many suppliers/customers/staff/shareholders will have lost money through something somewhere between gross incompetance and fraud.
It is all over I am afraid.http://www.investegate.co.uk/Article.aspx?id=200911111209323...Following recent events and extensive discussions with the Company, the banks have not been prepared to provide additional short term funding to the Company to enable it to continue to trade.Separately the Company has been actively exploring other financial options to secure working capital to continue to trade and protect value for shareholders. These options have also failed to reach a satisfactory conclusion in the time available. At the bottom of the announcement it does state that investigations are ongoing and states;The reviews into the value of stock as well as the accuracy of recent financial reports provided to the banks referred to in the Company's announcement of 3 November 2009 have yet to be completed. These matters are now under the control of the joint administratorsWill there be a final report to shareholders at some point or are such reviews kept private once the administrators rather than the company are in control ?
Personally I feel that an incident like this should be a matter for Police investigation as many suppliers/customers/staff/shareholders will have lost money through something somewhere between gross incompetance and fraud. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>I agree.I bought shares on the back of audited accounts.How could a company called Aero Inventory issue audited accounts if they didn't have a satisfactory inventory management system?Management have apparently been aware of this for a while - but chose not to make the matter public - & what the chuff were Deloittes doing for their money?Surely this first thing they should have done on an audit of this type of company was to check that the stock figures were reliable.Very, very angry!I want to see some justice here.
An interesting article from IC about this:http://www.investorschronicle.co.uk/Companies/ByEvent/Indica...Several former employees, who have spoken to the Investors Chronicle on condition of anonimity, blamed the state of the company's inventory management system.....Inexperienced buyers contributed further to the problem by ordering millions of dollars of slow-to-sell parts that would sit for long periods in various warehouses......Where were the auditors and the CAA both have very serious questions to answer.
Yes. I saw that.Extremely serious if true - which I believe.Management have clearly known about this for a while & auditors have clearly been asleep on the job.let's hope the same employees are currently talking to KPMG.
So far it looks like the only winner out of this is going to be KPMG as £2m for one month's work is not a bad return but the insolvency fees arguments have been aired elsewhere. The preferential creditors seem to be getting their money back but no news on what will happen to the directors nor the auditors ?http://www.financialdirector.co.uk/accountancyage/news/22555...KPMG bill £2m for Aero Inventory administrationRachael Singh, Accountancy Age, 05 Jan 2010Administrators has revealed their time costs have hit £2m+KPMG, the administrators of airline parts supplier Aero Inventory, has billed over £2m in time costs for their first month in charge.A statement of affairs and creditors' report has highlighted the firm's time cost equate to £2,012,075 for administration work for AIUK and a further £17,000.50 for work in respect of AIPLC, between 11 November and 11 December.