LONDON — EMI has issued a profit warning after uncovering significant accounting fraud at its recorded music business in Brazil.
Fraud caused EMI Music’s revenues to be overstated by £12 million ($22.6 million) and its operating profits by $17 million. Impact will be felt in the company’s financial results for the six months to Sept. 30.
EMI has suspended some of its senior management in Brazil pending full investigation of the fraud, which is understood to involve the false booking of stock as sold and shipped.
EMI’s stock price fell 4% when the news was announced.