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LAS VEGAS-Shares in locally based Sunterra Corp. fell sharply Friday after the company’s chief executive goes on administrative leave in the face of an alleged accounting scandal and its chief financial officer quits in favor of another job. The company’s share price fell 17.30% on Friday, dropping $1.50 to close at $7.17 on more than 10 times average volume, and was back to $7.89 in noontime trading Friday. The company’s 52-week range is $6.86 to $16.70.

According to SEC filings, a board audit and compliance committee is reviewing allegations of financial improprieties related mostly to its operations in Spain. The allegations were first made in December 2005 by a former employee of the company’s Spanish operations who had been fired with cause, according to the filing.

Board member James A. Weissenborn is temporarily taking on Benson’s duties. Weissenborn is managing partner and president of Mackinac Partners LLC, a merchant bank, restructuring and turnaround management firm providing interim management of Sunterra’s European operations.

Sunterra VP Robert Krawczyk is permanently assuming the CFO duties from Stephen West, who has left the firm to take another job. Krawczyk has served as Vice President and Corporate Controller of the company since August 2004 and was named the chief accounting officer in May 2005.

Sunterra dismissed its accounting firm Grant Thornton as its auditor in March. In April, Grant Thornton informed the SEC that it had not been informed of the former employee’s allegations.

A source at Sunterra would not comment beyond confirming the changes. A conference call is scheduled for Wednesday. Sunterra is one of the world’s largest vacation ownership companies with more than 318,000 owner families and nearly 100 branded or affiliated vacation ownership resorts, including Desert Paradise in Las Vegas.

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