For a short while it was going through some financial difficulties. It was no secret among the staff, many of whom were jumping ship. Those that weren't (myself included) were making plans to do the same.
Despite this the MD insisted on keeping the recruitment process going and carrying through with the graduate recruitment scheme. His reasoning was that he couldn't claim that his company was growing if it wasn't hiring. It was deception plain and simple, but for this particular MD morals were merely something he had once heard about.
Come the hour they did have to withdraw firm offers for both experienced hires and five graduates. It was particularly nasty for the graduates as they went through a ridiculously extensive recruitment process - including spending a weekend away at a woodland activity centre where they were forced to do team building exercises and climb a mountain in the dark.
Long story short, they kept the recruitment process going to make it look like the company was doing better than it was.
It was brutal, but the MD didn't care. He was probably more worried about where his next Merc was coming from.