Excel Airways, Alpha Catering and Accounting Practices

[jmc-man]

I came across this interesting story in the Telegraph recently..

http://www.telegraph.co.uk/money/mai.../cnalpha17.xml

Interesting reading that has already cost some heads at the top of Alpha. I was particularly intrigued with the following statement from Alpha Catering...

Alpha admitted last week that "by entering into the new commercial arrangements in October 2005", Alpha "consciously assisted that customer to put itself in a position in which it might have been able to manipulate its own financial statements in circumstances in which the customer's parent was preparing for an initial public offering".

So , unless I'm mistaken , it would seem ( from the text) that Alpha have admitted entering into an accounting deal that allowed some "manipulation" of Excel parent group finances just prior to stock market floatation.

If this is true, I imagine it could have some serious implications for Excel, the Avion Group and Alpha Catering.

Anyone heard any developments?

jmc-man

[Yer Man]

I would say that this is big trouble for excel.
I think the Icelandic authoritites will want the company investigated in depth.
This may be the tip of the iceberg when it comes to dubious accounting practices.

Should be interesting to watch what happens.

[Trinity 09L]

It is likely -allegedly - that "discounts" for business were included in one year of the accounts, and not spread over the life of the deal, thereby enhancing the profits of a company in one year, and possibly increasing the value of the company. Share price rises, bonuses rise.

[Thunderball 2]

Writing entirely hypothetically, without any specific reference being implied or intended to the context within which this post appears, and without any intention to impugne the integrity of any person or persons in the airline industry or any particular company therein, I would nevertheless make the observation that I am aware of numerous instances of practices such as those that have been referred to above, and others, which would have had the effect of distorting or manipulating the P&L results of certain airline companies or businesses associated therewith, some such practices having resulted in the gain by the perpetrators of sums of money having a large number of noughts on the end.