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UPDATE 1-Eniro finds accounting inaccuracies, shares plunge
September 5, 2014 / 9:51 AM / 3 years ago

UPDATE 1-Eniro finds accounting inaccuracies, shares plunge

(Adds share price, details, background)

By Olof Swahnberg

STOCKHOLM, Sept 5 (Reuters) - Sweden’s Eniro said on Friday it had unearthed inaccuracies in its accounts and may ask police to investigate, forcing the directories firm to cut profit forecasts again and wiping a third off its market value.

Eniro shares plunged 33 percent to 12.96 crowns by 0807 GMT, mirroring a similar slump after the company cut profit forecasts in July and extending its market slide this year to 74 percent.

The company, which replaced Chief Executive Johan Lindgren less than a month ago, said it expected earnings before interest, taxes, depreciation and amortisation of 700 million Swedish crowns ($99 million) in 2014.

On July 16, Eniro lowered its profit forecast to 850 million euros from about 950 million after a second quarter of weak sales at its Swedish business, above all at its eniro.se web search portal.

The company said on Friday it was looking into whether there were grounds to file a police complaint about the accounting inaccuracies it had discovered, but was not immediately able to say who might be targeted.

“If such grounds exist, a police complaint will be filed for the handling of the accounting,” it said. The company will hold a news conference at 1200 CET (1000 GMT).

Eniro said the negative impact of the inaccuracies came to 58 million crowns on sales and earnings before interest, tax, depreciation and amortisation in 2013, while the impact in the first half of 2014 was 28 million.

Eniro’s biggest shareholder Danske Capital, which owned 11.4 percent of share capital at the end of August according to the company’s website, declined to comment on the case.

PACKAGE RESCINDED

A traditional Yellow Pages outfit with more than 100 years behind it, Eniro’s old business model was undermined by the Internet and devices such as smartphones. Revenues have fallen by about half since the 2008-2009 financial crisis.

Eniro said it would rescind an agreed severance package for Lindgren. The company said less than three weeks ago that Lindgren was to be replaced by Stefan Kercza after the board and the former chief executive had “mutually agreed” he would leave.

Eniro also appointed Roland Andersen as new group chief financial officer on July 29.

Eniro’s board of directors has also commissioned an investigation to validate the firm’s accounts. The probe is being conducted by Eniro’s auditor, PricewaterhouseCoopers, which also was auditor for the company in 2013.

Eniro told Reuters in March sales should grow in 2015 after several years of falling revenues.

Eniro’s woes come in a week that has seen other European firms adjust past earnings due to accounting errors.

Swiss computer accessories maker Logitech said this week it would make minor adjustments to earnings for 2011 and 2012 due to erroneously booking inventories.

PricewaterhouseCoopers audited Logitech’s earnings in the affected years.

German sportswear maker Puma said this week it had understated its 2012 pretax profit by at least 10 million euros ($13 million) because of accounting errors.

Deloitte & Touche was Puma’s auditor for its 2012 report. (1 US dollar = 7.0709 Swedish crown) (Additional reporting by Helena Soderpalm and Mia Shanley; editing by David Clarke)

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