Dragon Oil to probe purchasing

26 February 2009

26 February 2009 | Jake Kanter

Dragon Oil has launched an investigation into "possible irregularities" in its procurement procedures.

The probe, which will be carried out by the company's board and professional services firm KPMG, will examine alleged "improper conduct" by former senior managers in its marketing and contracts department. Dragon Oil would not give further details on the alleged impropriety.

In a statement, chief executive Abdul-Jaleel Al Khalifa said: "This matter is completely unacceptable. Having identified the possibility of these irregularities, the board is moving swiftly to investigate them and will take action to ensure purchasing procedures are operating properly and that appropriate actions are taken."

The oil producer's preliminary results, due to be released on 4 March, will now not be released until the investigation is completed. The company wants extra time to consider if the possible irregularities have affected its financial position.

Dragon Oil's share price on the London Stock Exchange (LSE) has fallen 28.5 pence today since the announcement was made.

The company, which is based in Dubai but listed on the LSE and Irish Stock Exchange, plans to issue an update to shareholders regarding the investigation before the end of March.

SMfeb2009

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