The head of the fire and security division was sacked

The huge industrial group Tyco has discovered a new black hole to add to its accounting scandals.

It told investors it was setting aside $1.1bn to cover the charges and that will push the company into the red for the second quarter of the financial year.

Only last month the chairman, Edward Breen, said the company expected charges of just $325m in the quarter.

The Bermuda-based group said the new charges meant it would be reporting a loss of 55 cents a share.

From a perception standpoint, it's just one more negative for an already troubled company Sean Egan, Egan-Jones Ratings

Analysts had been expecting a profit of 32 cents a share.

Tyco said the new problems were discovered in internal audits and related mainly to its ADT security alarms business.

In March the company fired the head of its fire and security division which includes ADT.

Restoring credibility

This is the fourth time since October that the company has either restated results or taken an accounting-related charge.

Last month Mr Breen vowed to clean up Tyco's far-flung operations and promised heads would roll if he found more problems.

"From a credit quality standpoint, they can take the hit," said Sean Egan, managing director of credit rating agency Egan-Jones Ratings.

"However, from a perception standpoint, it's just one more negative for an already troubled company.

"Hopefully, Breen is on his way to restoring some of the credibility of the company.

"But revelations of this nature certainly don't help that effort."