| 10.9°C Dublin

Ex-Worldspreads CEO Foley 'had no knowledge' of irregularities

IRISHMAN Conor Foley yesterday insisted he had no knowledge of financial irregularities at spread-betting giant Worldspreads when he stepped down as chief executive early last week.

The first public comments from Mr Foley came as administrators KPMG yesterday said there was a £13m (€15.6m) shortfall in Worldspreads' client accounts and admitted it was "likely" that customers would not get all their money back.

Founded in Dublin in 2000, Worldspreads expanded at breakneck speed to become one of the UK's largest spread-betting firms.

Its Irish unit, which is now completely unconnected to the UK business, was sold for €11m in 2009 -- a year when Worldspreads grew profits by 666pc.

The firm's onward march was abruptly halted last Friday when its shares were suspended on London's AIM and the Dublin index after Worldspreads informed the UK regulator of financial irregularities.

Mr Foley, who is also Worldspreads' biggest shareholder, had stepped down two days earlier, citing his desire to "pursue other interests". The company's finance boss Niall O'Kelly also resigned in recent weeks and was released from his notice period.

A statement issued by a Dublin public relations firm yesterday said Mr Foley "wishes to make clear that the first he learned of these issues (the financial irregularities) was on Friday morning last, at the same time as the rest of the board".

"His decision to step down as CEO earlier last week was completely unrelated."

The precise detail of the irregularities at Worldspreads has not yet been revealed, but the scale of the shortfall is expected to be in the £10m to £12m range.

Yesterday, KPMG said Worldspreads owed clients £29.7m and had £16.6m in cash.

"One of the immediate priorities of the special administrators is to investigate and attempt to reconcile all client positions to establish the extent of the shortfall," the statement added.

Frozen

Clients' accounts were frozen on March 16, preventing them from withdrawing money or adding to their funds, according to Sorrelle Cooper, a spokeswoman for KPMG in London. Any open positions were also closed, she said.

Worldspreads clients facing losses may have access to the Financial Services Compensation Scheme, which covers as much as £50,000 per claimant, the Financial Services Authority said.

Business Newsletter

Read the leading stories from the world of business.

This field is required

The firm had 66 employees, who would be initially retained "to support the orderly wind-down of the business", KPMG said. Redundancies were nonetheless probable, it added.


Most Watched





Privacy