The famous London black cab manufacturer has unveiled a black hole of £3.9m of accounting errors.
Maganese Bronze manufactures the iconic black cab at its Coventry production line and has been operating in the UK since 1948. It is blaming the installation of a new IT system for the accounting understatement.
The integrated IT system was installed back in August 2010 to help the company deal with its increasingly global supply chain. This new system has led to an overstatement of stock and to some transactions from previous years not being processed.
A statement from the company said: “Due to a combination of system and procedural errors, a number of transactions relating to 2010 and 2011 and some residual balances from the previous system were not properly assessed through the new IT system.
It continues: “This problem led to the over-statement of stock and under-statement of liabilities in the financial statements of historical losses which go back over several years, although the work to apportion the loss between previous years is not yet complete.”
Trading for the specialist automotive manufacturer has been difficult over the last year, and in May they announced that they expected to report substantially higher net losses than last year.
Peter Johansen joined the company in December last year as finance director and it was hoped that his appointment would strengthen the company’s relationship with its Beijing-based shareholder and business partner Geely.
The company will now delay the release of its half-year results.