The Baltic Oil mystery

Posted by Neil Humeon Jun 15 10:50.

File this one with “the dog ate my homework”.

Here’s Aim-listed Baltic Oil Terminals explaining why its shares have been suspended on Wednesday.

From a company press release.

Emphasis ours.

In early 2011 the Company made significant changes to the senior management team at its operations in Kaliningrad, Russia which included the dismissal of a senior employee. Following these changes it became clear that some of the local financial records had either been destroyed or removed and an attempt made at replacing these with falsified information.

The Directors do not believe that these actions have led to any previous financial information reported to the market proving erroneous, however, the Company has had to conduct an exercise to reconstruct the accounting records at its operations in Kaliningrad based on primary sources of information, in particular the receipts of inventory received into the terminals. The Directors had expected that this process would have been completed by now. However, they are now of the view that this process, and hence Grant Thornton’s audit of the Annual Accounts, will now not be completed by 30 June 2011.

Dockers, eh.

Now, under rules of London’s junior market companies have six months to publish results following their fiscal year-end. In the case of Baltic Oil, which has a 50 per cent interest in Rosbunker transhipment terminal in Baltysk, that was December 31st.

In spite of the missing papers and the potential for falsification, Baltic insists results will be in line with expectations and says there’s no reason to doubt its trading performance or the financial position of its Russian operations.

It is believed that the trading performance and financial position of the operations in Russia are not matters of uncertainty; rather it is the detail of the books and records and their current ability to be audited that is the issue.

All the same it’s somewhat disconcerting especially given the dismal performance of this company since its flotation at 140p a share in 2006.

This entry was posted by Neil Hume on Wednesday, June 15th, 2011 at 10:50 and is filed under Capital markets. Tagged with , , , .

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