Scam-hit Healthcare Locums (HCL) hoped to soothe investor jitters by saying the majority of its UK operations are sound and it is considering refinancing opportunities to stabilise its capital structure, but the on-going probe has cast a shadow over the validity of its prior year results.

HCL's new chairman Peter Sullivan said the investigations have revealed several cases of incorrect accounting treatments and added that, "It is probable that a material amount of profit which the company recognised over recent years will need to be written back."

However, the company failed to comment on the extent of the restatement as the audit and investigations were unfinished.

"The lifting of the suspension of trading in the company's shares and the production of the 2010 audited accounts have regrettably taken longer than we would have hoped," Sullivan added.

On 25 January, the healthcare recruiter suspended its shares from trading on AIM stating that it had strong reason to belief that the financial performance of HCL for the year ended 31 December 2010 would be materially below expectations. This was followed by the suspension of its chief finance officer Diane Jarvis and four other members of the board.

In addition to the accounting irregularities, Sullivan noted that HCL had borrowed a "substantial sum of money" from National Australia Bank, Commonwealth Bank of Australia and Ares Capital in December 2010 by misrepresenting the true financial position.

Furthermore, the company on Tuesday announced that it had sold its homecare unit for about £22.2m and will use the net proceeds to reduce debt.

AR

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