Wood Group Highlights Financial Culture Issues, Shares Plummet
(Reuters) -British oilfield services and engineering firm Wood Group said on Monday it had identified "material weaknesses and failures" in its financial culture within its projects business unit, following an independent review conducted by Deloitte.
Shares in the company, which have slumped about 68% since the review announcement in November, fell about 25% in early trade.
The company, which is currently a takeover target for Dubai-based Sidara, said in November last year it was initiating an independent review following the exceptional charges recorded at its interim results.
The London-listed firm said these failures included "inappropriate management pressure and override to maintain previously reported positions", leading to instances where information was withheld from the company's auditors.
The group highlighted significant change within its structure and steps taken during and since the period covered by the review, including changes in key finance roles and the engagement of external experts to assist in applying accounting standards.
"We are committed to implementing a detailed remediation plan, including necessary follow-on actions from the review, to continue to strengthen the group's financial culture, governance and controls," the company said in a statement.
In February, the struggling company received a renewed takeover approach from Sidara, following a failed attempt six months earlier. Last week, the deadline for Sidara to make a firm offer or walk away got extended to April 17.
Last month, the group's CFO Arvind Balan stepped down immediately following an incorrect description of his professional qualifications.
After a turbulent few years marked by activist investor pressure for a sale, unsuccessful takeover proposals, and the recent review, the company had forecast negative cash flow for another year.
(Reporting by Anandita Mehrotra and Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and David Evans)
