City File: MTM may see an end to its troubles

THE Serious Fraud Office is understood to have decided against acting on allegations in a report by the auditor Binder Hamlyn into the affairs of MTM, the troubled chemicals concern.

The report alleged aggressive and fraudulent accounting transactions to boost group profits and assets over a long period, but it is understood that the SFO has decided the amounts allegedly involved are too small to warrant a full investigation. The case has been handed back to the Department of Trade and Industry, which may appoint inspectors.

The SFO's decision is good news for attempts to refinance MTM. Bankers believe its financial health is not nearly as bad as feared and expect to be able to carry on supporting the company without the need for a complex financial restructuring, such as a debt-for-equity swap.