WorldSpreads enters administration owing clients millions

The company, which runs online and telephone trading services, said on Monday Jane Moriarty and Samantha Bewick from accountancy firm KPMG had been appointed as joint special administrators. Moriarty said job cuts were likely. The company employs around 66 people.

"Our aim is to close down the business, collect the cash and give it back to customers. There won't be a prospect of a sale of the business because the problems have come up so quickly and there will be some redundancies," Moriarty told Reuters.

WorldSpreads said its directors believed that, as of the close of business on March 16, there was a shortfall of around us$ 20.6 million of client money. It added that gross amounts owed to clients were estimated at around us$ 47.1 million, while the company had total cash balances of around us$ 26.3 million.

Conor Foley, who is also WorldSpreads' largest shareholder, stepped down as the company's chief executive last Wednesday, two weeks after Chief Financial Officer Niall O'Kelly submitted his resignation on the day the group issued a profit warning.

WorldSpreads said it had identified financial irregularities following a company review and warned last month it would report a loss for the year ending March 31.