Stephen Pearl resigned after it emerged an incentive scheme involving shares for company directors had not been disclosed within audited financial statements.
No further action is to be taken against the company after it agreed to include the incentive scheme in the company’s audited statements for the year ending March 2000.
Desmond Bloom, chairman of Eurocity, said: ‘Our auditors were kept closely informed. The information omitted should have been there, its omission was not intentional.’
He said Pearl had been asked to resign and said he believed the company had provided ‘adequate information’ to shareholders. The original complaint, he said, had come from only one shareholder.
A statement from the review panel said the problem arose in the accounts for the year to March 1999 and involved an incentive scheme which provided for certain directors to receive new ordinary shares at a price of 80p.
The panel said: ‘The disclosure should have been made within the audited financial statements rather than in the unaudited director’s report and should have disclosed the number of shares each director is to receive.’
Eurocity was found to have breached the 1985 Companies Act. The review panel has powers to make an application to the courts for an order forcing the revision of company accounts however, Eurocity has resolved the situation voluntarily.
www.frrp.org.ukFinancial Reporting Review Panel
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