Do you need to blow the whistle ?

If a company has accounted for something which you feel is not in the spirit of the true and fair view or is bending the rules a little too far, please let us know.

Whistle-blowers' Corner will look into any cases that you report to us. All we ask is that you provide us with a brief description of the practice, the name of the company or a copy of their accounts and we will do the rest. Although we can provide no guarantees, if you can provide a big enough breach, we will run the story.

Please e-mail, phone or fax to contact the Whistle-blower ... or send a brown paper envelope to:

Company Reporting Ltd.
11 John's Place
Edinburgh
Scotland
UK
EH6 7EL

Tel: +44 (0)131-561 8000
Fax: +44 (0)131-561 8001

Whistle-blowers' Corner

This is the place where we investigate companies which are brought to our attention by our readers. Who controls Tesco Personal Finance Group Ltd? We identify Findel's unique treatment of customer recruitment costs, focus on Amerindo Internet Fund for a conflict of interest at board level and highlight XKO and Deloitte & Touche's diluted loss per share mêlée.

If you are interested in blowing the whistle on a company, please read our frequently asked questions page first.

Tesco Personal Finance Group Ltd

An analyst drew our attention to how Tesco Personal Finance Group Ltd (Tesco Finance) was accounted for by Tesco plc and The Royal Bank of Scotland Group plc (RBS). RBS claimed it had full control over the investment. Conversely, Tesco indicated that it had a share of control. Our conclusion in December 2003 was that one of the shareholders was accounting incorrectly for this investment. This conclusion has been confirmed following an investigation by the Financial Reporting Review Panel and RBS now treats its investment as a joint venture.

Amerindo Internet Fund plc

An analyst in the investment industry directs us towards the latest annual financial statements of Amerindo Internet Fund plc (Amerindo) and a conflict of interest at board level. There are two principal issues: (i) in the current market environment should Amerindo recognise

impairments to its unquoted internet investments held at directors' valuation; and (ii) has its policy been influenced by a conflict of interest on the board as one of the directors and his alternate own the investment manager; and the investment management fee is totally dependent on asset values.

Findel plc

We exposed the financial statements of Findel and in particular questioned its accounting policy to defer catalogue and customer recruitment costs. We concluded that "there is no scope under UK GAAP for customer recruitment costs to be deferred and recognised as an asset".

Four months later, Findel announced that it has elected to terminate its deferral policy with immediate effect and will now write off these costs immediately to profit and loss account.

XKO plc

A concerned analyst asked us to investigate an eps calculation provided by a small IT house, XKO, and in particular its method of calculating diluted earnings per share (in fact, in this case, a loss per share). We observed that XKO was not following accounting standard FRS 14 "Earnings per share" as it had "out of the money" options, which by definition are anti dilutive, and was treating them as dilutive on advice of its auditors Deloitte & Touche.