The Financial Reporting Council (FRC) has fined the former boss of failed Christmas savings company Farepak £65,000 over his conduct during its collapse.
The accountancy tribunal issued William Rollason - the previous chief executive of Farepak and parent company European Home Retail - with a severe reprimand, a fine of £15,000 and costs of £50,000 towards bringing the disciplinary action.
The sanctions stem from a settlement between him and the FRC last week, in which he accepted that he had acted recklessly and contrary to professional ethics. An independent tribunal then met yesterday (11 June) to decide on the sanctions.
FRC executive counsel Gavin Rees QC, said: “This case shows the high level of integrity expected from chartered accountants who take up executive positions in business. It is vital that chartered accountants in business comply with good governance to ensure the accuracy of financial statements.”
As a member of the ICAEW, Rollason admitted to the FRC that the recklessness related to his drafting and distribution of a memo to his fellow EHR directors that “did not reflect the financial position of HER” and could have been misleading.
He also signed a letter stating EHR would continue to help Farepak meet its liabilities as they fell due, knowing the letter would be relied on by Farepak’s auditors.
Last summer the company came to a settlement with customers who had lost money in 2006 when Farepak collapsed.
Around the same time a High Court judge said the former directors of the company had done nothing wrong, but criticised the behaviour of bank HBOS.
Last November the FRC also it had filed a formal disciplinary complaint against the Ernst & Young UK and one of its former partners, Alan Flitcroft, over their auditing of Farepak.
The FRC accused them of misconduct and failing to meet expected auditing standards when auditing the company.