The business support group announced last week that it had axed a quartet of
its management, but it refused to give any more details. Speaking to Accountancy
Age, Jones confirmed that his position was secure, declaring that no further
write-downs were on the horizon at other Interserve divisions.
‘There are no other mis-statements anywhere else in the group. This was a
mismanagement that had been going on for a number of years as a result of a
concerted attempt by a group of individuals,’ he said.
‘We clearly have a system of controls in place, but it doesn’t allow for a
situation like this,’ said Jones.
‘It’s almost impossible to devise something that would prevent it because of
the number of people involved, but we have spent a lot of time sorting the issue
out and planning for the future. We’ve executed everything we’ve done in a bid
to learn from this experience.’
The industrial services division head, Steve Hagerty, left Interserve a month
before the irregularities came to light. His successor, Bruce Melizan, spotted a
paper trail of false invoices as the unit geared up to merge with another
section of the business after rival firm MacLellan was snapped up for £116m last
The resulting probe, undertaken by KPMG and lawyers Linklaters, put another
dent in the company’s fortunes with an £8m price tag – £3m higher than expected.
Commenting on the sackings, Jones said: ‘These were directors in the
industrial services division.’
It is believed Alex Corless, the division’s finance director, and his deputy
were two of the four booted out after Interserve suspended six senior staff from
the industrial services arm on full pay last year. The other two executives have
been cleared and are now back at work.
Despite the damaging setbacks, Jones, who joined the company in August 2003
from Novar plc, maintained that the corporate had clawed back some of the ground
that had been lost in the wake of the accounting crisis.
‘We’ve made a number of acquisitions and the integration of MacLellan is
going very well after identifying £3m of cost synergies. We’re still going to
make our numbers,’ Jones said.
The company is set to release its preliminary results in March.
Steve Allen has been appointed interim managing director of finance for
Transport for London, replacing Jay Walder who is taking up a post at
consultancy giant McKinsey. Allen has been TfL’s director of corporate finance
since he joined London’s transport organisation in 2003.
BEA restates accounts
US-listed business software maker BEA has been forced into a major accounting
restatement going back nearly ten years after a review found that most of the
stock options it granted from June 1997 to June 2006 had inappropriate
accounting dates and compensation expenses that were not recorded.
The company said it expects to restate financial statements from fiscal 1998 to
fiscal 2007, and to record pre-tax non-cash compensation expense of $340m
(£170m) to $390m (£195m), with the majority of this expense relating to grants
made in the fiscal 1999 to fiscal 2002 period.
FTSE 100 deliver OFRs
FTSE 100 companies are still producing operating and financial reviews even
though the government scrapped the requirement at the end of 2005. A study by
business think-tank Tomorrow’s Company found that companies had continued with
the OFR because of the investment made in complying with the reporting standard.
According to research in the report, 48 FTSE 100 companies still describe their
narrative report as an OFR. This, said Tomorrow’s Company, indicates that many
companies have derived tangible benefits from a more detailed reporting on
business prospects than the EU Business Review generates.
‘We have long believed that the discipline of inclusive reporting is a spur
to better governance and better decision making, which benefits shareholders and
ultimately customers in the marketplace,’ said Mark Goyden, of Tomorrow’s
Unilever wins ‘smoothie’ appeal
Unilever has won its VAT appeal against HM Revenue & Customs over whether
its Vie shot was a food or beverage.
Sir Stephen Oliver decided at a VAT tribunal that the shot, which contains
sweetcorn, pineapple and passion fruit, was a food and not a beverage, so was
VAT free. HMRC previously said that smoothies should attract VAT because they
‘slaked the thirst of drinkers’. Alcoholic drinks, tea and
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements