Damco UK Limited, the British arm of Denmark-based global logistics and freight forwarding company Damco, has dismissed two senior executive directors following the discovery of alleged financial irregularities in its 2010 accounts.
As reported in the Sunday Times last weekend, KPMG, Damco's auditor, uncovered irregularities at the closing of the branch's 2010 accounts, which resulted in a substantial reduction in profits for the year.
A source at the company, who wished to remain anonymous, told Eurofruit Magazine that chief executive officer Aron Newton and chief financial officer Shaun McLean had already had their appointments terminated over what were described as 'financial misdeeds'.
'The accounting was so covert that KPMG Forensics had to be called in,' the source told Eurofruit Magazine. 'They found that the pair were guilty of 'conscious deceipt and exaggerating revenues', so both have been forced to step down.'
According to records filed at Companies House, the official UK register of companies, Damco terminated the appointments of Mr Newton and Mr McLean on 3 February 2011.
Speaking to Eurofruit Magazine on Thursday, 24 February, a spokesperson at Damco's head office in Copenhagen declined to make any specific comment on the dismissals themselves, but was keen to rule out rumours that Damco's entire UK operation might be about to close.
'We're definitely not closing the offices in the UK,' the spokesperson confirmed.
It had earlier been suggested that the company, which has a total of 13 offices in the UK according to its website, had opted to transfer all of its UK-based operations to India.
Kim Sorensen, chief executive officer of Damco Europe, was also approached for comment but could not be reached at the time of going to press.
Damco UK manages cargo logistics on behalf of a number of UK retailers, including Marks & Spencer.
Mr McLean had been working with Damco UK as a director since January 2010, while Mr Newton was appointed as a director in April 2008.
Damco is part of the AP Møller-Maersk group, which yesterday announced record profits of US$5.01bn for 2010.
Damco itself made a profit of US$44m for the year, increasing its earnings margin (before interest and taxes) to 2.8 per cent from 1.0 per cent.
Additional reporting by Tom Joyce.
