French engineering group Alstom said today it found accounting errors at a US subsidiary.
The Paris-based engineering firm, which makes France's famed TGV trains, said in a statement it would take a €51 million charge after significantly understating losses on a contract at its US transport arm.
The charge almost wiped out operating margins at its core transport business, one of the few profitable parts of the debt-choked company, and further weakened investor confidence ahead of a vital shareholders meeting this week, analysts said.
While Alstom said the irregularities, which involved hiding costs to swell margins, were only detected in one contract and the charge was modest, analysts reckoned there could be more to come.
They added it showed sloppy management at a company already struggling to avert a cash crunch.
The US Securities and Exchange Commission and the Federal Bureau of Investigation were conducting informal inquiries related to the US unit, Alstom said.
Shares in Alstom, which have slumped some 90 per cent in the past two years, traded down 4.14 per cent at €3.01 in Paris this morning.