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Former Cattles FDs banned at disciplinaries

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19th Feb 2013
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The former finance director of troubled Yorkshire financial services group Cattles and the finance director of its subsidiary Welcome Financial Services have been disciplined at separate hearings in London.

At a Financial Reporting Council (FRC) disciplinary hearing today, Welcome FD Peter Miller was excluded from the ICAEW for six years. This followed the outcome of a hearing yesterday concerning Cattles FD James Corr who was excluded from ICAS for eight years.

An FRC spokesperson confirmed the bans and said there were “no other penalties or costs” imposed on the men for their roles at the companies where serious accounting errors were discovered.

The tribunal agreed there would be no financial penalties because of the sanctions already brought against the two FDs by the Financial Services Authority (FSA). The disciplinaries follow an earlier investigation by the FSA where Corr and Miller were fined £400,000 and £200,000 respectively.

In addition, early last year both accountants were banned from performing any functions in relation to any FSA-regulated activities.

At the recent hearings large parts of the FSA investigation were used as evidence.

Miller admitted the FSA findings, but argued he had only failed in his role as FD through severe negligence, and not that he had deliberately misled shareholders and auditors.

Corr also accepted the findings constituted misconduct for the purposes of the tribunal, and that the sanction to exclude him was “proportionate and appropriate”. An application for readmission to ICAS should be based on merit and not automatic, the tribunal heard.

Back in March last year the FSA also banned Welcome managing director, John Blake, and fined him £100,000; however Blake has since referred his case to the Upper Tribunal.

The overall FSA investigation found that Cattles’ 2007 annual report contained “highly misleading” arrears, impairment and profit figures.

It stated that just £0.9bn of Welcome’s £3bn loan book was in arrears, when if accounting standards had been properly applied the correct figure would have been £1.5bn; and announced a pre-tax profit of £165.2m, when in fact it suffered a pre-tax loss of £96.5m.

Earlier this month Cattles launched a multimillion-pound High Court claim for damages against PwC alleging failings in the way the Big Four firm audited its accounts.

The company claims PwC failed to spot danger signs in its accounts during audits in 2006 and 2007, and that mis-stating the financial position of the company led to it accumulating £1.6bn in debts and liabilities.

A High Court date is expected to be set for early 2014.

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By Jolif
21st Feb 2013 12:23

The Banning of Former Cattle FDs

I think the ban is ok but the unfortune part is that these men will be able to practice somewhere else even with the UK becuase the ban is from FRA-regulated activities. Its like Auditors have been culprits in a lot of financial scandles. I say so because most of big companies that have been wound Auditors did there audit but did not find anything that could endanger the continuity of the company.

Its like for auditors its just business i.e. money they are looking for and not ensuring that the shareholders funds are protected.

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