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Netherlands – Brunel CFO leaves after fraud

12 March 2013

The chief financial officer at Dutch recruiter Brunel International (BRI:AEX) is stepping down after the company reported a costly fraud at its US office in early March. The firm informed shareholders on Monday that Rob van der Hoek is leaving both his post and the firm with immediate effect.

It said that the decision had been reached “in mutual consent.” Brunel CEO Jan Arie van Barneveld, will now take over all responsibilities of Mr Van der Hoek.

Brunel found evidence of fraud at its Huston office, forcing the recruiter to take a €9.7 million charge as financial results had been overstated. Mr Van Barneveld said one employee had inflated revenue to make margins look better. Revenue was manipulated for operations in the United States, Canada, South America, Chad and Angola, he said.

The supervisory board has now engaged KPMG to perform a “thorough investigation” into the matter. This investigation needs to be completed for finalising year-end financial statements, the company said.

The company has also postponed the general meeting of shareholders who last week complained about a lack of information regarding the fraud.  

According to the company’s 2011 Annual Report, Brunel executed a global risk assessment during that year and came to the conclusion that financial reporting was not one of the company’s main risks although it would “keep ensuring to meet high standards of reporting”. The company goes on to say that “monitoring the adequacy and effectiveness of internal risk management and control systems is an on-going improvement process” Nevertheless, the company did not use an internal auditor.

After the CFO’s departure was made public on Monday, the company’s share price fell by nearly -2% but recovered towards the end of the day. 

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