Scottish car dealer Taggarts owner Lookers warns shares may be suspended

Car dealership giant Lookers has seen its troubles mount after it discovered a potential fraud on its books.

Car dealers in general have had a tough time of late. Just 20,000 new cars were registered in May compared with 184,000 during the same month in 2019, the Society of Motor Manufacturers and Traders said last week. Picture: Lisa Ferguson

The Taggarts owner, which last week said it planned to close more showrooms and axe 1,500 jobs, warned investors they might be unable to buy and sell its shares from the beginning of July.

Bosses will likely have to suspend shares, potentially until the end of August, after a review into last year’s accounts by auditing firm Grant Thornton.

The auditor’s experts have been poring over the group’s 2019 financial statements since being appointed earlier in the year. They have now submitted a draft report to the company.

In March, Lookers disclosed that it had found irregularities in its books and delayed the publication of its annual results, which were due in April.

“The company has identified potentially fraudulent transactions in one of its operating divisions,” it said at the time.

Just days later, chief operating officer Cameron Wade resigned, after less than two months with the firm. No reason was given for his departure.

Now the business has said it, and its regular auditor Deloitte, will need more time than allowed under Financial Conduct Authority (FCA) rules to get its results in order. If it cannot deliver the results by the end of June, shares will be suspended.

Lookers told investors: “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.”

The likely suspension will last until the group manages to publish its results. Auditor Deloitte has told the company it intends to resign from the job.

Last week, Lookers said it would close more showrooms and cut 1,500 jobs amid news of a further plunge in UK new car sales.

The firm, owner of the long-established Taggarts business and some Audi dealerships in Scotland, is launching redundancy consultations across all areas of the group, which are expected to see some 1,500 jobs go among its 8,100-strong workforce.

It came as the group revealed it would shut a further 12 sites – either by closure, merging with other showrooms or refranchising – on top of the 15 dealerships being closed already under plans announced in November.

Lookers’ update came as it emerged last week that new car sales across the UK had tumbled 89 per cent during May as the lockdown virtually wiped out trade, though that was less severe than April’s 97 per cent plunge. Just 20,000 cars were registered in May compared with 184,000 during the same month in 2019.

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