FRC severely reprimands former Farepak boss

The Financial Reporting Council (FRC) has given ICAEW member and former Farepak Foods director William Rollason a severe reprimand, slapped him with a £15,000 fine and ordered him to make a contribution of £50,000 towards the FRC's costs.

A settlement was agreed between the FRC's executive counsel, Gareth Rees QC, and Rollason on 7 June, when the former chief executive of European Home Retail plc (EHR) 'accepted that he acted recklessly in a way that was contrary to the fundamental principle of integrity (as set out in the ICAEW Guide to Professional Ethics)'.

Rollason was deemed to have fallen foul of the institute's ethics on two core counts by 'drafting and distributing to his fellow directors of EHR a memorandum which could mislead as it did not reflect the financial position of EHR'.

His second major breach was committed 'by signing a standard form letter on behalf of EHR to Farepak stating that 'it [EHR] will continue to support Farepak Foods and Gifts Limited to enable it to meet its liabilities as they fall due' in the knowledge that the letter would be relied on by Farepak's auditors in connection with Farepak's financial statements for 2004-5 even though he was aware that EHR could not be relied on to deliver that commitment'.

Gareth Rees QC, said: 'The FRC is pleased with the outcome of this case. 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.'

The tribunal met on 11 June 2013 to consider what sanctions should be imposed.

Rollason had previously asked for the complaint against him to be dismissed on the grounds of abuse of process but after two days of legal hearings an earlier tribunal decided against him.

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