An external probe of Metronet’s accounts failed to reveal the scale of its troubles, because the company books were significantly off track, government watchdogs have been told.

London Underground’s manag-ing director Tim O’Toole said that LU had found it difficult to gauge the situation at Metronet after bringing in outside auditors to probe the company in 2006, because the beleaguered company ‘did not know what the numbers were’ itself.

O’Toole revealed the dire state of the finance function at Metronet when he faced the House of Commons’ transport committee last week.

The transport committee also grilled Metronet’s former chairman Graham Pimlott on the ‘serious black hole in [its] finances’. Pimlott conceded that the company was in such financial disarray that Metronet ‘ran out of cash. There were undoubtedly inefficiencies’.

Metronet’s finance function was proportionately smaller than that of its rival Tube Lines, despite maintaining two thirds of the Underground network.

When asked who was to blame for the situation, Pimlott said: ‘Those who were on the board of Metronet each had the opportunity to do something about it.’

Former FD Philip Pacey and four other executives parted company with Metronet in the wake of the debacle. O’Toole said that they had not been ousted, but simply that they ‘did not figure in [London Underground’s] plans’.

Ernst & Young administrator Alan Bloom added that Pacey and the other four executives had not been given severance packages.

‘We made no payments for loss of office to any of the five Metronet executives. We offered them a certain amount in retention payments to stay on for a short period,’ Bloom said.

COMPANY REPORTS

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