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Mayflower directors resign as firm reports accounting irregularities and shares tumble

With the discovery of accounting irregularities that could cost some £20m, Mayflower Corporation, the supplier to Land Rover among others has announced that chief executive John Simpson, finance director David Donelly and joint MD John Fleming are to resign when the firm's delayed 2003 preliminary accounts are announced next month. Chairman Rupert Hambro will also resign when a replacement is found.

Alan Jamieson, who was appointed as Chief Restructuring Officer in February 2004, will become chief executive and Bruce Wright will join the Board as interim finance director.

The resignations coincide with the reporting of accounting irregularities in Mayflower's TransBus division, relating principally to delays in passing on payments from customers to one of the Group's finance providers, which are expected to increase the firm's debt by nearly £20m, though Mayflower's board says it is not currently aware of any adjustment that would alter profit. Investigations by PricewaterhouseCoopers are continuing. Meanwhile, Mayflower continues to be in discussions with its principal lenders about renewed financing arrangements. Shares in Mayflower dropped 43% yesterday to 5.25p on the news of resignations and the hole in its accounts.

A buyout vehicle called Melrose, floated on the AIM last year, took yesterday's opportunity to announce its interest in acquiring Mayflower, “in the hope that it will assist in the process of restructuring” the firm, which issued a profits warning last December.

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