The CityView board said it had received information which may indicate that a non-current asset, currently carried in CityView's accounts at $3 million, may not be recoverable in full.

In the independent accountant's reports in the 2002 Annual Report, BDO Chartered Accountants said the recoverability of loans to Sands Solution amounting to $300,000 is dependent on the future successful commercial development and exploitation of underlying e-commerce technology products.

In January 2000 CityView announced it had taken a 10% stake in Sands Solution, an entity associated with former CityView CEO Mark Smyth, for $5 million.

In July 2001 CityView said it had advanced $2,750,000 to Sands Solutions on commercial terms secured by a registered fixed and floating charge over the assets of Sands Solutions. The statement said at the appropriate time the loan would be converted into an equity interest in Sands Solutions.

"The company is closely monitoring the situation with regard to this asset and will provide further details to the market when it obtains a better understanding as to the present value of the asset," Friday's statement said.