Speedy Hire boss quits after discovery of £5m accounting black hole

The chief executive of Speedy Hire quit on Thursday night after 26 years at the tool rental group following the discovery of £4.5m-£5m of dubious accounting at its Dubai-based international division.

Steve Corcoran, who had worked his way through the ranks to become chief executive in 2005, fell on his sword after the group said controls appeared to have been “repeatedly and deliberately circumvented”. He earned a basic £355,000 last year and is not expected to get a pay-off.

The discovery, announced after the market closed, forced the group into what it termed “a constructive dialogue with its lenders”.

It said it remained “in compliance” with financial covenants but noted “these circumstances have resulted in a breach of certain other terms”.

The accounting irregularities were discovered just weeks after the arrival of a new boss for the international arm, Andy Wright, who took up his post on November 12.

The division’s finance director has now been suspended, while other senior divisional management are under investigation. Addleshaw Goddard has been hired “to conduct an independent legal investigation”, while forensic accountants will shortly be appointed.

The group said: “The information currently available suggests that certain control processes within the international division have been repeatedly and deliberately circumvented.”

The shares will come under pressure on Friday after Speedy Hire said consensus full-year profits forecasts of £20.9m were likely to be hit by £3m, with earlier accounts also re-stated.

The group said the "accounting mis-statements are isolated to the international division and are not expected to have a material impact on cash".

Last month the group said Mark Rogerson would be joining as chief operating officer, taking up his post on Monday.

He is now in the running for the chief executive's job. Mr Corcoran will remain "with the business for a period to allow for continuity with customers, suppliers and employees", Speedy Hire said.

The shares, which had closed down 0.25 at 64.5p on Thursday, tumbled 16pc in early trading on Friday