The Italian Sea Group has appointed advisory firm KPMG to carry out independent forensic due diligence following a company acknowledgement that it has incurred significant extra budget costs relating to yacht production.
KPMG will carry out an investigation to ascertain the extent of the extra budget implications in order management.
TISG’s board of directors says a group of individuals implemented a system designed to circumvent the controls preventing expenditure in excess of the budget approved for each project.
The scope of the group and the identity of those involved, which have so far only been partially identified, are currently being further determined as part of the ongoing forensic due diligence.
The total amount of overspend is not yet known.
Management of orders
The company says its initial investigations show that some senior executives acted without the knowledge of the chief executive officer, the board of directors, and the supervisory bodies.
Formal disciplinary warning letters, in some cases accompanied by precautionary suspension, have been served on the individuals identified to date.
KPMG’s investigations will cover the entire management of the orders currently in progress, the internal control model and financial management.
It is estimated that the investigations will take up to six weeks for the initial preliminary phase, subsequently extending sampling over the following two months, based on the evidence that will emerge.
Extra costs
The chief executive officer has initiated a series of managerial actions aimed at recovering the extra costs through discussions with the owners of the vessels currently in progress.
In addition, payment of employee salaries was delayed by eight days due to insufficient liquidity prior to a shareholder loan being processed.
Workers carried out a two-hour strike in protest.
In addition, discussions with financial institutions have been initiated in order to agree on the measures necessary to address the financial situation.
Filippo Menchelli has resigned from his position as member and chairman of the board of directors and Marco Carniani has resigned from his position as member and vice chairman of the board of directors, as well as from his position as manager responsible for the drafting of the company’s financial reports.
