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Pyne Gould's Marac unit to take $2.5 million provision for irregularity over loan

Monday 8th February 2010

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Pyne Gould’s Marac finance unit has turned up irregularities relating to a business loan and will take a $2.5 million provisions against its first-half results.

The loan, dating back to 2003, was uncovered when the company adopted new auditing processes last October, Pyne Gould said in a statement today. It was the only irregular loan that was found. The shares fell 2.2% to 44 cents today and have fallen 63% in the past six months.

“The circumstances behind that irregularity have only recently been ascertained, but it involves lending that is outside the company’s internally prescribed practices,” said chief investment officer Craig Stephen. “The circumstances do not appear to have involved personal gain. However, evidence points to the unauthorised lending having been suppressed.”

Pyne Gould said it remains confident of meeting its full-year earnings forecast. It declined to make further comment about the loan ahead of its first-half announcement, due before the end of this month.

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