By Kristy Dorsey

Lookers, owner of the long-established Taggarts chain of car dealerships in Scotland, has warned that its shares will likely be suspended as investigations continue into potential fraud within the business.

The auto group has also announced that it will be parting company with its current auditor, Deloitte, after its full year results for 2019 are eventually published. The delay in producing the year-end financial statement will be the trigger for halting trading in Lookers shares.

Last week, Lookers said it intended to publish its 2019 accounts by the end of this month. The group also confirmed that a draft report by Grant Thornton, which is investigating suspicious transactions within one of the Lookers divisions, had been shared with Deloitte “for review in the context of their audit opinion”.

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Having now discussed the draft report with Deloitte, Lookers said it has concluded that the additional procedures it and Deloitte will now need to perform to finalise the 2019 results means it will not be possible to publish them by the June 30 deadline. This is the last date permitted for publication by the Financial Conduct Authority’s (FCA’s) disclosure and transparency rules.

“After consultation with the FCA, if the 2019 results are not published by 30 June 2020 the company anticipates that trading in the company’s shares will be temporarily suspended with effect from 7am on 1 July 2020 until publication of the 2019 results,” Lookers said in a statement to the London Stock Exchange.

“The company’s priority and focus is the production of the 2019 results at the earliest possible date and by no later than the end of August 2020.”

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Lookers first postponed publication of its full-year results in March, when it revealed it was investigating potential fraud within one of its divisions. The group has not identified which division the problems pertain to, other than to say that the issues relate to one of its 31 discreet car businesses that deal with specific car brands.

It operates 164 car dealerships across the UK, but announced last week that it plans to close 12 sites and cut 1,500 jobs in a bid to generate annual savings of £50 million amid a UK car market beset by challenges even prior to the Covid-19 pandemic.

Similarly, Lookers also had its share of troubles prior to the outbreak taking hold. The group parted company with its chief executive and chief operating officer in the second half of last year as it issued two profit warnings in less than four months. It has also been under investigation by the FCA, which is looking at “control issues” in sales processes between January 2016 and June 2019.