FD and auditors cleared over Semple Cochrane

Deloitte, its partners and the former FD of engineering group Semple Cochrane
have been cleared of disciplinary charges laid against them.

The Joint
Disciplinary Tribunal (JDT) dismissed the complaints laid against Deloitte
& Touche, auditors David Crawford, John Durie and Marshall Miller, and
former FD and chief executive William Evans.

Semple Cochrane was a Scottish public limited company, which had worked on
the refit of the Landing Ship Sir Bedivere (which had taken part in the
Falklands Campaign).

Accounting issues arose at the group over the 1999 accounts, among others.
While the issued numbers had showed an operating profit of £2.9m, a new board of
directors, with new auditors, revised the accounts, transforming the profit of
£2.943m into a loss of £2.6m.

All complaints laid against the accountants involved, except for one admitted
breach of a rule requiring the keeping of adequate auditing records, were
dismissed by the JDT on the grounds that they were unproven or there was not
enough evidence.

The admitted breach, related to audit work done by Rutherford Manson Dowds, a
Deloitte predecessor firm, did not warrant any action, the JDT decided. The
Institute of Chartered Accountants of Scotland referred the matter to the Joint
Disciplinary Scheme.

The JDS’s
executive counsel laid complaints against Crawford, for alleged inadequate work
over several years; against Deloitte and Touche and Miller, for alleged
inadequate work on the 1999 audit of Semple Cochrane; Durie, for alleged
inadequate work on the flotation of Semple Cochrane in 1996; and Evans, in
respect of his responsibility for Semple Cochrane’s alleged inadequate contract
accounting both before and after its flotation in 1996.

Eventually, Semple Cochrane, owing £37m, was sold to Teesland, in 2002.
Teesland was recently itself bought by Valad (Hurst) Ltd.

Vince Niblett, head of audit at Deloitte, said: ‘The JDS report provides long
overdue confirmation that there were no grounds to the complaints against
Deloitte. Deloitte has maintained from day one that this disciplinary action was
unmerited and we are pleased to have been fully exonerated.

‘However, it is regrettable that it has taken almost eight years to conclude
this inquiry since the matter was referred to the JDS in November 2000. The
careers of a number of innocent individuals have been unfairly prejudiced by
this inquiry hanging over them for so long.

‘We take our audit responsibilities extremely seriously and the tribunal’s
finding is testament to our robust approach.’