Music giant EMI fell sharply after a shock announcement that it had uncovered fraud in its Brazilian business. Senior management has been suspended.
A brief statement said the fraud resulted in an over statement of revenues by £12 million and operating profits by £9 million. The shares fell 8.75p to 272p.
The affair will cause huge embarrassment to EMI, best known for stars such as Arctic Monkeys, Coldplay and Robbie Williams.
Profits of the recorded music division rose 15% to £145 million last year. At the time the company drew attention to the performance of its business in Brazil.
EMI said it had gained market share in every country in Latin America with the best performance coming from Brazil.
Today EMI(EMI) said it had identified through its internal controls, a 'one-off accounting fraud affecting the reporting of results at EMI's recorded music business in Brazil.'
The impact of the fraud will be reflected in the results for the six months just ended. In the meantime EMI ' is conducting a full investigation and is suspending certain of the senior management of the Brazilian business.'
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