SFI shares suspended

SFI Group, the pub operator, has asked for its shares to be suspended on the London Stock Exchange until it can sort out its finances.

The company announced last month that it would have to cut back on the number of new pubs it was opening after pressure from its creditors. It also said that its bankers had "granted temporary waivers in relation to certain breaches of the existing banking facilities".

A review of SFI's finances has now found that the group's assets have been overstated and its liabilities understated for several years. The discrepancy is likely to be more than £20m.

The review also found that the company's financial model at the time of acquiring Parisa Café Bars in November 2001 was "over-optimistic" and that cash-flow controls were inadequate.

SFI said today in a statement: "The board is implementing revised accounting procedures and policies designed to prevent a recurrence of the misstatement of assets and liabilities of the group and to ensure that the group's reporting systems reflect properly group profitability and cash generation."

Tony Hill, chairman and previous chief executive, has resigned. He will be replaced in the short term by deputy chairman Robert Lo.

Andrew Latham, who was appointed chief executive in April, is continuing a full strategic review of the group.

The statement added: "In the circumstances, the directors believe that it is in the best interests of the company and its shareholders that dealings in its shares are suspended pending the conclusion of the strategic and financial reviews and clarification of its financial position."