PracticeConsultingFormer FD faces fraud charges

Former FD faces fraud charges

Accountants formerly employed by engineering company Powerscreen, including the former finance director, have been charged in connection with an alleged multimillion pound fraud.

Ex-finance director Barry Cosgrove, former chief executive Shay McKeown, both of County Tyrone, Northern Ireland, and director Edward Holmes, of Leamington Spa, have been charged and bailed to reappear in Stroud Magistrates Court on 30 April.

The charges follow an investigation launched by the Serious Fraud Office in 1998 after accounting irregularities were discovered at Matbro – a Powerscreen subsidiary, based in Gloucester.

Powerscreen itself, along with the Institute of Chartered Accountants in Ireland and the London and Dublin Stock Exchanges, launched inquiries.

As a result of the affair, the share price of Powerscreen nosedived and the company had to write off £7.7m. More than £250m was wiped off the value of the company at the time the irregularities were discovered.

Qualified accountant Cosgrove, 45, faces two charges of trying to make a dishonest gain for himself for loss to another by falsifying Matbro’s management accounts in 1997.

McKeown, 47, also a qualified accountant, is charged with misleading potential investors by concealing the fact the company accounts were false and misleading concerning the level of its profitability.

Holmes, 36 – who qualified with the ICAEW – was charged with 25 offences, including knowingly carrying on the Matbro business for a fraudulent purpose – and for defrauding the auditor KPMG.

More on this case.

Briefing: THE POWERSCREEN SAGA
March 98 – Powerscreen brings in forensics from Price Waterhouse to oversee KPMG probe into massive losses.

April 98 – Barry Cosgrove, former finance director and chief executive Shay McKeown questioned by Irish ICA following an investigation into missing millions from company accounts.

June 98 – KPMG’s audit came under fire following allegations it failed to signal losses.

October 99 – The Irish ICA appoints accountant and lawyer to head its investigation into the activities of Powerscreen and its auditor KPMG.

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