BusinessCompany NewsErinaceous faces more drama with new FD

Erinaceous faces more drama with new FD

Analysts have predicted that the new finance director at troubled property services group Erinaceous may not last long

Dominic Lavelle was last week appointed FD at
Erinaceous after
falling on his sword at
Alfred
McAlpine
. His appointment surprised investors and stakeholders, given the
turbulent conclusion to his last post.

He left Alfred McAlpine as a five-year accounting fraud in the slate division
of the company was exposed. An investigation by Alfred McAlpine’s internal audit
team found that slate managers had misrepresented sales and production volumes
on the books and then resorted to discounted pre-selling of stock to make up the
shortfall.

Lavelle thought it best to step down because the scandal had happened ‘on his
watch’, according to sources at the company. Now analysts are speculating that
he may not be in for the long haul at Erinaceous.

A city source said: ‘His tenure may be short if some of the shareholders
manage to force board changes. They are likely to bring in a new FD as well.’

The source added: ‘He did drop a clanger at McAlpine. It was an oversight on
his part. He was rather too trusting of the management. He is an experienced FD
nonetheless.’

Erinaceous has also
been beset by problems. It was embroiled in a multimillion-pound fraud case
relating to the over-valuation of property. Its subsidiary company
Dunlop Haywards
settled a £26m claim brought by
Nationwide
out of court, but a similar case brought by Cheshire Building Society against
the division has yet to be resolved.

Recently, the group was under pressure again after it announced that it had
broken its banking covenants. The company said that its troubles would not
affect its revenue forecasts, but the City still reacted badly.

Shareholders were so unhappy with the situation that they launched a campaign
to oust chief executive Neil Bellis and FD Michael Pearson. Pearson resigned
before the matter was taken out of his hands and Bellis became executive deputy
chairman.

COMPANY REPORTS

Down is up for FD’s role at Wetherspoon

JD Wetherspoon has selected Keith Down to be its new financial director.
Down, currently FD of Tesco’s commercial arm, replaces Jim Clarke who recently
announced his departure from the company. The FD-apparent has a BA in economics
and qualified as a chartered accountant with Peat Marwick McLintock, now part of
KPMG. John Hutson, chief executive of JD Wetherspoon, said: ‘I am delighted to
welcome Keith to JD Wetherspoon’s executive team. He brings with him a
considerable amount of relevant experience and I look forward to working with
him in taking the company to the next stage of its development.’

Down assumes financial control of JD Wetherspoon on 9 January 2008.

CFOs shrug at credit crunch effect

In all, 92% CFOs believe tighter credit conditions are likely to have a
negative effect on the UK economy, but expect the impact on their own business
to be minimal, according to Deloitte’s first CFO quarterly survey of corporate
financial attitudes. The Benchmarking Corporate Financial Attitudes survey shows
CFOs were more optimistic about the effect on their own business. A minority of
42% expected some negative impacts, but the majority of them believed the impact
would be slight. Up to 46% said they expected no impact on their business.

Margaret Ewing, Deloitte partner and vice chairman, said: ‘This may reflect
the fact that CFOs of larger corporates believe their own company is robustly
financed and they are confident of their banking relationships allowing them to
weather the conditions.’

Dutton starts work as Punch Taverns FD

Phil Dutton has begun his role as Punch Taverns’ FD. He joined the FTSE 100
company as an executive director in September, but departing FD Robert McDonald
officially stepped down after staying on to ensure an orderly handover. Dutton
was formerly FD of Matalan plc from 2002 to 2007. Before that he held a number
of senior finance positions at Asda, between 1990 and 2002. Between 1985 and
1990, Dutton was an audit manager with PricewaterhouseCoopers. Punch Taverns
chief exec Giles Thorley said: ‘We couldn’t wish for a better successor in Phil
Dutton. He brings exceptional financial experience.’

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