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U.K. Accounting Firm Hit by Going Concern Worries

June 15, 2010

Trading in the shares of a British accounting firm, Vantis, has been suspended on the London-based AIM exchange after the firm admitted that it may not be able to continue trading on a going concern basis.

The firm’s chief executive, Paul Jackson, decided to step down, according to The Guardian, and he is being replaced by the finance director, Steve Smith.

The firm has been experiencing cash flow problems after its advisory and tax services business took a substantial hit from the recession. Advantis also felt the effects of the fallout from the liquidation of Ponzi schemer Allen Stanford’s Antigua-based bank. Advantis was supposed to receive fees from the liquidation, but it has been embroiled in a dispute with the U.S. receiver over who should have jurisdiction and control over about $370 million worth of assets at Stanford International Bank. An Antiguan court ruled that the Vantis liquidators should be removed and alternative liquidators appointed, according to the Financial Times. Another Vantis liquidator, Nigel Hamilton-Smith, has also resigned from the Vantis board.

An accounting firm that is experiencing going concern problems seems to be an ironic twist, but is another sign of the lingering effects of the recession and the financial chicanery at banks like Stanford’s that led up to it.

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