Record accountancy ban for AssetCo former execs

Three former senior executives of AssetCo, who were all members of Chartered Accountants Ireland (CAI), have been given the longest ever bans from the profession by the Financial Reporting Council (FRC) for misconduct

John Shannon (former chief executive officer) has been excluded for 16 years, Raymond ‘Frank’ Flynn (former chief financial officer) for 14 years and Matthew Boyle (former financial controller) for 12 years. Additionally, fines of £250,000, £150,000 and £100,000 respectively have been imposed.

AssetCo was an AIM-listed fire and rescue services business that provided fire engines to the London Fire Brigade.  As a result of the misconduct, AssetCo substantially restated its financial statements in 2011 with a £146m reduction in assets and £25m reduction in profit, and significant loss was caused by the collapse in share price from 60p to 1.75p. The dishonest conduct of management was concealed. The FRC opened its investigation in late 2014.

The FRC’s executive counsel brought a total of 27 allegations of misconduct against Shannon, Flynn and Boyle before the disciplinary tribunal, all of which were upheld.  These included findings of dishonesty and failing to act in accordance with core standards of integrity, objectivity and competence, which related to dealing with company funds, the preparation of financial statements, and the recognition of fictitious assets and revenue. The tribunal also found that they had each misled the auditors, Grant Thornton UK.

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’.

In April 2017 the FRC fined Grant Thornton UK £2.275m and gave retired partner Robert Napper a three-year ban and a £130,000 fine after its investigation identified a range of ‘widespread and significant’ failings in work on the audits of AssetCo for the same periods.

FRC AssetCo report is here

Report by Pat Sweet

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