Brocker's fortunes tumble once more

By PETER GRIFFIN

The fortunes of Auckland-based IT company Brocker Technology have gone from bad to worse.

The Toronto-listed company may be forced to lay off 160 people and scale back its Australasian operations after balance sheet discrepancies prompted a sweeping review.

Improper invoicing discovered nearly two weeks ago in the accounts of Sealcorp Australia, Brocker's computer distribution division, led to an overstatement of the company's revenue by around $CA4.5 million ($6.7 million).

Spokesman Nigel Murphy said it seemed former Sealcorp manager Chris Spring had attempted to disguise the division's serious financial problems, although there was no indication it had been for personal gain.

Sealcorp Australia was closed last Friday with about 30 redundancies and Brocker would try to eliminate other non-performing units by the end of the financial year, cutting staff from 250 to 90.

The redundancies would cut annual staff costs by $CA6.8 million and allow the company to concentrate on its successful subsidiaries, Mr Murphy said.

It was not known how many staff in New Zealand would lose their jobs.

Brocker would continue as a scaled-down group of four divisions, he said.

A vendor services unit would be involved in mobile phone distribution, and an online telecommunications division would keep developing telecoms services, such as the "one number anywhere" Bloodhound system.

Brocker's recently-acquired IT arm Datec would be unaffected.

Mr Murphy said Brocker's management was confident the accounting irregularities were confined to its Australian operations, but PricewaterhouseCoopers would do a full audit of the group.

The process could delay the release of the company's third-quarter results to December.

In the half-year to September 30 last year, Brocker reported a loss of $CA860,875.

Allowing for the accounting shortfall, Brocker's management estimates shareholders' equity will remain above $CA21 million.

Share trading on the Nasdaq and the Toronto Stock Exchange is likely to resume once the review is complete, but Brocker's share price has been hovering at around US50c ($1.15), well below the minimum $US1 bid price required for Nasdaq-listed companies.