MSB under fire on profits warning

A FURIOUS Peter Flaherty, former chief executive and major shareholder of IT recruitment group MSB International, is demanding the board resign after it issued a profits warning just eight weeks after stating earnings were on track.

He said: 'I am shocked and dismayed at this change of forecast.' Flaherty, ousted a year ago, tried unsuccessfully to stage a comeback and remove acting chairman and chief executive John Bateman at MSB's annual meeting in June. Bateman has now quit in favour of finance director Andrew Zielinski.

On his first day in charge, Zielinski revealed MSB will break even this year instead of making £2m profits, due to 'continued economic difficulties and uncertainty'.

But Flaherty, with 17%, said: 'The board cannot blame the market, which has not changed materially since last September. In fact they have failed to read it correctly and have failed shareholders.'

MSB shares, down 2p to 36p, have fallen from 97 1/2p since December. Four years ago, they topped £10. The firm is no stranger to controversy. Founder Mark Goldberg lost a fortune with Crystal Palace FC.

Zielinski is taking MSB into finance and IT sales jobs and has cut costs, slashing six-figure salaries of sales staff by 30%.

All recruitment firms are suffering, and mergers are likely. Zielinski said he 'has discussions' with rivals but 'no one is knocking on the door'.