Orchestream admits irregularities

ORCHESTREAM has admitted to accounting irregularities and said it booked revenues it had not received on about 10 contracts over the past six months or so.

Its shares, which had already plunged from a peak of 692 1/2p, today collapsed 2 1/2p to 3 1/4p.

The network software group, founded by Charlie Muirhead, is to slash its workforce from 160 to 100 with most of the cuts coming from its main sales office in London's Kensington.

Orchestream said that the wrongful accounting meant that last year's sales and profits were over-inflated by £2.7m and in the first quarter of this year by £900,000. It blamed 'additional contractual terms' which came to light after the sales had been booked.

A spokesman pointed out that new chief executive Anthony Finbow, who only joined the group as finance director in February, had not been in charge during the bulk of the accounting irregularities period.

He said the job cuts and other costcutting would lead to quarterly cost savings of £1.1m, leaving ongoing expenses at £3.1m a quarter.

Orchestream, which raised £49m when it floated in June 2000, had £10m left in the bank at the end of June.