Topaz Top Management Fired, Jobs Cut as Renaissance Finds Financial Fraud

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Topaz Group, which in March pulled an initial share sale inLondon, had its top management removed and jobs cut after parent Renaissance Services SAOG (RNSS)uncovered financial fraud at the company. Renaissance shares plunged.

Topaz Chief Executive Officer Fazel Fazelbhoy stepped down in May after oil and gas services provider Renaissance “uncovered some serious issues” at the unit, Renaissance said in a statementto the Muscat, Oman stock market today. Topaz’s finance director and the chief operating officer of Topaz Engineering also resigned, and the entire corporate human resources department has been removed.

“The investigation uncovered evidence of fraud, ethical misconduct and control weaknesses over a number of years,” Renaissance said in the statement. “In light of these findings, the company extended the investigation across all Topaz businesses. The investigation is at an early stage but some further similar concerns have arisen.”

Dubai-based Topaz, an engineering and marine business which operates mainly in the Caspian Sea and provides services in Brazil and Africa, said in March it would not proceed with an initial share sale in London, citing market conditions. Topaz planned to use the proceeds of the IPO to finance the expansion of its fleet to 165 vessels, Fazelbhoy said March 16.

Renaissance Chief Financial Officer Stephen Thomas has been appointed interim CEO of the unit, the company said. More than 100 jobs at the Topaz Engineering unit will be cut as part of the restructuring.

Profit Drops

Renaissance first-half profit dropped to 2.3 million rials ($6 million) from 9.8 million rials a year earlier, the company said. It made a provision of 1.85 million rials related to a contract cancellation, while finance charges almost doubled to 8.4 million rials.

The shares slumped 10 percent, the biggest decline since April 2005, closing at 0.621 rial in Muscat. The stock has lost 44 percent this year compared with a 19 percent drop in the benchmark Muscat Securities Market Index.

Renaissance said it expects to see improved operating performance in the second half of the year and that “all agreed and committed payments will be made on time.”

Source: Bloomberg,

http://www.bloomberg.com/news/2011-08-15/topaz-top-management-fired-jobs-cut-as-renaissance-finds-financial-fraud.html

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