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Co-op launches civil action over 'missing' £5.3m

Ilkeston Consumer Co-op, the parent company of the Co-op Motor Group, is launching legal action against a former director following the disappearance of £5.3m from company accounts.

The group has launched civil proceedings against an undisclosed number of parties including Martin Sale - the former Motor Group financial director.

Eversheds, the firm's East Midlands-based solicitors, confirmed that legal proceedings had been initiated against Sale and others. Sale issued a statement through his solicitors, saying: “These proceedings are being vigorously defended.”

Group chief executive Tony Teatum tells AM that more than £2m of the missing cash was linked to an alleged fraud and that investigations are continuing.

He says the alleged fraud had contributed significantly to the overall loss of £2.7m in the trading year to October 7, 2001. But with pre-tax profits up 204 per cent to £2.45m, Teatum stresses the company will survive without making job cuts.

“The message we are trying to get across is that the company is going forward. There will be no redundancies, no sell off and no job losses,” he says, adding that civil action is being taken to regain lost cash.

The firm dismissed Sale - who had been on sick leave since June, 2001 - in January. A stand-in accountant is said to have discovered anomalies in the company's accounts in October.

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