TUI CFO quits after black hole found in finances

City A.M. Reporter
TUI Travel, Europe's largest travel company, restated 2009 results and said its finance chief will go after stumbling across £117m ($185m) owed by customers that will now have to be written off.

TUI Travel, controlled by Germany's TUI AG , said that having written off £29m at the time of its third quarter results in August, an ongoing audit had uncovered a further £88m of irrecoverable balances.

"These have arisen as a result of failures to reconcile balances adequately in legacy systems," TUI Travel said in a statement on Thursday. "As a result, TUI Travel now believes it is appropriate to restate its results for the year ended 30 September 2009."

The company said it had been integrating IT systems.

The impact on its 2009 result will be to knock 2.8 pence off earnings per share, cutting them to 21 pence from the 23.8 pence previously reported.

For the 2010 business year just ended, TUI said it remained confident results would be in line with previous guidance and that net debt would be lower than previously indicated.

TUI said Chief Financial Officer Paul Botwell had resigned and would leave the company at the end of this year.

"Paul is behaving honourably and I am disappointed that he will be leaving the Group. He is one of the most capable Chief Financial Officers I know," Chief Executive Peter Long said in a statement. "I have specifically asked Paul to remain with the business to see through the full year audit."