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By editorial@silicon.com, 13 March 2001 18:45

NEWS Steven Laitman was suspended and eventually sacked on 18 February after discrepancies between revenues and user hits were discovered by the company's financial director Eddie Abrams three days earlier. Two senior managers, who cannot be named for legal reasons, in E-District's technical department have also been suspended, although one of the people in question has subsequently resigned. As a result of an internal inquiry it has come to light that revenues in the company's unaudited interim results, for the period ended 30 June, have been significantly marked down from an initial £1,038,069 to a post-investigation figure of just £32,000. Subsequently, on 19 February the company issued a statement on its web site outlining the situation. It says: "It is not clear over what period of time this overstatement has occurred but it could include all of 2000. The board is not aware of any misappropriation of funds." A spokesman for E-District said that an inquiry into the payment of one of E-District's former advertising agencies, 24/7, set the chain of events in motion, after a discrepancy arose between what was owed to the supplier and how many hits had been recorded. However, he said: "We don't know if it was on the revenues side or on the user side." A meeting with the board was held on the Saturday following an internal investigation and the following day Laitman was visited in hospital where he was being treated for a heart condition and was notified of his suspension and was later fired. According to the E-District spokesman, the company is still in discussion with the Met, although no preliminary investigation into the company has begun yet. It is now up to the fraud squad to make an assessment on the situation before further steps are taken, which could include an investigation by the Serious Fraud Office. PricewaterhouseCoopers is the auditor for the company and has been since its inception in 1998. E-District is being represented by Bristol-based law firm Osborne Clarke while Laitman has retained Dechert, formally known as Titmuss Sainer Dechert, as counsel, which counts the late business tycoon Robert Maxwell as among its many well known clients.