10 Aug 2018
Executives at a firm that supplied engines to London Fire Brigade have been banned for committing some of the ‘most serious’ misconduct crimes brought before the UK’s accounting regulator and a tribunal hearing.
The Financial Reporting Council (FRC) brought 27 allegations of misconduct against the former execs of fire and rescue firm AssetCo.
The allegations included dishonesty and failing to act in accordance with core standards of integrity and objectivity regarding dealing with company funds.
The charges also related to the preparation of financial statements, and the recognition of fictitious assets and revenue, the FRC said.
They were also found to be guilty of misleading the auditors Grant Thornton.
“As a result of the Misconduct, AssetCo substantially restated its financial statements in 2011 (£146m reduction in assets, £25m reduction in profit) and significant loss was caused by the collapse in share price from 60p to 1.75p,” the FRC said.
The trio – former CEO John Shannon, ex-CFO Raymond Flynn and former Financial Controller Matthew Boyle – were excluded respectively for 16, 14 and 12 years.
In addition, fines of £250,000, £150,000 and £100,000 were respectively imposed.
Claudia Mortimore, interim Executive Counsel at the FRC, said: “The misconduct of the three accountants in this case is the most serious the FRC has put before a Tribunal.
In addition to the financial harm caused to the company and to many investors, the actions of these individuals have damaged public confidence in the profession.
“The Tribunal has recognised this and it is reflected in the imposition of lengthy periods of exclusion (being the longest ordered to date), as well as substantial financial penalties. These sanctions should send a clear message that the manipulation of financial statements, and in particular dishonesty, will be dealt with robustly.”
Efforts to get comments from AssetCo and its former execs were unsuccessful. London Fire Brigade declined to comment.
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