In January 1998, Powerscreen, the second largest listed company in Northern Ireland, was a star of the engineering sector and growing fast.
It had recently bought the successful forklift manufacturing operation Moffett Engineering, had reported a 15 per cent rise in pre-tax profits for the six months to the end of September and raised £18 million sterling (€28 million) in a placing of three million shares. Since its formation in 1986, Powerscreen had reported uninterrupted growth.
A terse one-page statement to the Dublin and London Stock Exchanges ended all that. Accounting irregularities at Matbro, a subsidiary which manufactured tractor units with telescopic arms for the farming and construction industries, brought Powerscreen to its knees.
Matbro was a jewel in the crown of the Dungannon-based group. It had been bought in 1991 for £3 million sterling and, by 1998, had been pencilled in to contribute profits of £10 million sterling for the full year. Instead, Powerscreen had to allow for a £46 million loss. For the group , this would mean a loss of £10 million.
Within a fortnight, the company's sales and marketing director, Mr Patrick Dooey, who had overall charge of Matbro had announced his resignation.
If the company thought that might draw a line under its troubles, it was wrong. A report in the Financial Times said the problems in Matbro were widely known in the industry two months before the company told the stock exchange.
Powerscreen chief executive Mr Shay McKeown and finance director Mr Barry Cosgrove stood down in March.
By May, the company had sold the troubled unit to John Deere for £7 million. The British Serious Fraud Office had also started looking into the affairs of the company.
Weeks later, the company signalled the worsening state of the company with news that the expected annual loss of £10 million sterling had grown. Losses for the year were now expected to top £65 million. In the end, they hit £74 million.In June ,1999, the company gave up the fight and the board recommended a £181 million sterling takeover bid from US group Terex.
A month later, the Institute of Chartered Accountants in Ireland announced an inquiry into the behaviour of its members - KPMG, its audit partner Mr Saunders Graham, Mr McKeown and Mr Cosgrove.
In January of 2001, the British authorities charged Mr McKeown, Mr Cosgrove and Mr Eddie Holmes, the former managing director of Matbro, who left the company just before the losses emerged, with various charges related to fraud and the collapse of the company.
The proceedings are ongoing.
