The owner of the Slug & Lettuce pub chain, SFI Group, has suspended trading in its shares after uncovering �20m of accounting errors.

SFI also said that its past cash flow controls had been "inadequate", and added that its chief executive Andrew Latham, who was appointed in April, would be carrying out a full strategic review of the group.

Last month SFI's share price plunged by two-thirds in one day after it issued a profit warning and scrapped its final dividend.

At the time it said it had breached some of its banking conditions because of a rapid pub opening programme which had added 46 new outlets, and created debts of �120m.

On Monday, shares in SFI closed at 31 pence, down from a high of 294.5p in May last year.

SFI's chairman and previous chief executive Tony Hill has resigned, and has been temporarily replaced by deputy chairman Robert Lo.

Accounting problems

SFI, which also runs the Litten Tree and Bar Med brands, had been undergoing a financial review.

The group said it found that it had over-stated assets and under-stated liabilities "to an amount which, in aggregate, is likely to exceed �20m".

The review also found that at the time that it bought the Parisa Cafe Bars in November last year, SFI's financial model "assumed operating cash flows approximately �10m in excess of those actually reported in the financial year ending 31 May 2002".

It said given the preliminary findings of this review it had asked for its shares to be suspended.