Fund managers want further clarification of the circumstances surrounding Powerscreen International's £46.7 million provision for problems in its Matbro subsidiary, following a meeting with the Northern Ireland company's chairman in Dublin yesterday.

Meanwhile, a spokesman for Powerscreen has said the company would have no problem widening the audit to examine the accounts of the publicly-quoted engineering group. However, he stressed that the company was confident the problem was confined only to Matbro.

It also appears that pressure on Powerscreen's chief executive, Mr Shay McKeown, to resign is receding, for the moment at least. "People felt it would be better if he remains in place for the immediate future," said one fund manager. Several fund managers told The Irish Times last night that a number of questions remained unanswered after yesterday's meeting with Powerscreen's chairman, Mr John Craig, which lasted for more than 1 1/2 hours.

The managers quizzed Mr Craig on how the company has had to revise a projected £50 million sterling pre-tax profit for the year to the end of March, to a £10 million loss, largely due to the £46.7 million provision for its subsidiary Matbro.

The company said the losses occurred at Matbro's UK subsidiary. The announcement, late last month, wiped more than half the market value off the company. The share, which traded at £6.50 at one stage, has begun to recover slightly and finished yesterday at 294p, up 4p on the day. However, more than two million shares were traded in London, according to dealers, a higher level than normal. The fund managers, who met Mr Craig at the company's Dublin stockbrokers Goodbody's, said the chairman addressed the questions posed, but did not provide full answers to many of them.

"As far as we concerned a lot of questions are still unanswered," said Mr Pat Woods, of Standard Life, which has around 1.5 million shares in Powerscreen. "We will be keeping in close contact with the company until we get a satisfactory outcome," he said.

"Mr Craig kept saying we will have to wait until the review of Matbro, which Powerscreen's auditors KPMG are carrying out," said another fund manager. "It was largely a PR exercise," said a third.

Mr Craig met fund managers following a request from the Irish Association of Investment Managers. It wrote to him last week, seeking a meeting as a matter of urgency.

The move followed news that JCB, a rival of Matbro, had written to dealers last November, outlining difficulties which Matbro was having in the specialist tractor market. Fund managers and investors were incensed, maintaining that, if it was widely known in the industry that the subsidiary was having difficulties, then Powerscreen executives should have known.

They were also very angry that a short time later Powerscreen raised £18 million in a share placing, to buy SDC Trailers in Northern Ireland. It is believed Irish fund managers subscribed the bulk of this money.

Several of those who attended yesterday's meeting said they had expected little to come out of it. They said Mr Craig promised that the board would be strengthened and its financial procedures re-asssessed. The bonuses paid to directors last year may also be reassessed, he is believed to have told the fund managers.

It was said that the three senior executives each had responsibility for a number of subsidiaries and the company was run more like a partnership.

"The whole structure of Powerscreen will have to change," said one fund manager.

One senior executive, Mr Pat Dooey, is to resign at the end of March. It was said he had overall responsibility for Matbro. Powerscreen has also appointed a company executive, Mr Hubert Watson, to the board, where he will also oversee Matbro. Fund managers said Mr Craig laid great store by Mr Watson.

One fund manager said Mr Craig had told them the board had been unaware, at the time of the placing in December, that the financial controller of Matbro in the UK had left. He said fund managers found this incredible.

Fund managers again expressed disbelief that the problems in Matbro only began during the current financial year. They were still taken aback at the size of the irregularities in a company with a £90 million turnover and the fact that these irregularities had not been detected until recently.