Auditors have exposed 'dubious' transactions within Germany's Advanced Medien's financial statements for 1999 and 2000, rendering them 'ineffective' and according to some analysts, potentially fraudulent.
In an ad-hoc statement, the Munich-based concern declared that, "as part of the required corrections, the sale of film rights with a total volume of Euros 39m will be eliminated from the financial statements for fiscal years 1999 and 2000. The underlying film rights will be re-entered with an appropriate valuation". The statement also noted that this would change the basis for the financial statements for the last fiscal year, but that the income statement of the consolidated financial statements for 2001 "will probably not be significantly affected".
The management board had consulted an auditor and expert opinion due to the ongoing civil action against Advanced's principal debtor Maxxfilm Produktions GmbH which has been dragging on since April 2001.
The investigating court came to believe that there may have been sham transactions in 1999 and 2000 between the management board at that time and Maxxfilm Produktions GmbH, with the involvement of one supervisory board member.
According to Advanced, "the additional work required for the new preparation of the financial statements will probably affect the timely publication of the financial statements for fiscal year 2001."