Wood Group UK flags problems within its Projects Unit, Shares Slump

Wood Group, a British engineering and oilfield services company, said that it has identified "material failures and weaknesses" in its financial cultures within its Projects Business Unit following an independent Deloitte review.

Early trade saw shares of the company fall about 25%. They have fallen about 68% since November's announcement.

In November of last year, the company, which is a target for Sidara in Dubai, announced that it would be conducting an independent review after the unusual charges noted at its interim results.

The London-listed company said that these failures included inappropriate management pressure and override of previously reported positions, leading to instances when information was not disclosed to the company's auditors.

The group highlighted the significant changes within its structure, and steps taken since and during the period covered in the review. These included changes to key finance roles and engagement of external experts for assistance in applying accounting standard.

The company stated that it was committed to implementing an extensive remediation plan. This will include any necessary follow-up actions resulting from the review.

Sidara re-approached the struggling company in February after a failed takeover attempt six months prior. Last week, Sidara's deadline to submit a firm bid or withdraw was extended until April 17.

Arvind Balan, the CFO of the group, resigned last month after an incorrect description was made about his qualifications.

The company's cash flow was negative for the next year after a turbulent period marked by activist investors pushing for a sell, failed takeover proposals and a recent review.

(source: Reuters)