FRRP review forces out Sanctuary boss

Sanctuary Group, the music company that has been plagued by accounting
problems since October 2005, today suddenly axed chief executive Andy Taylor
over his handling of the group’s accounts.

The company, which represents the likes of Beyonce and Morrissey, dropped
Taylor after reviewing the company’s accounts in order to respond to questions
from the Financial Reporting Review Panel (FRRP).

Sanctuary Group said: ‘The Board’s decision to remove Mr Taylor followed
their conclusion that certain of the prior year adjustments made in the 2005
accounts should have been presented as a correction of fundamental errors and
not as changes in accounting policy.’

Sanctuary added that ‘the accounting policies adopted by the company in the
2005 financial statements in respect of the items under review were appropriate’
and that it would not have to adjust its balance sheet. The group may, however,
have to make further adjustments to its profit and loss account as a result of
‘certain exceptional items being recognised in prior years’.

Taylor will be replaced by Frank Presland, the chief executive of
Twenty-First Artists Management Limited, a company that was acquired by
Sanctuary last year.

In January this year Sanctuary reported a fall in revenues to £156m for the
year ending 30 September 2005 from £167m in 2004. Pre-tax losses increased from
£26.7m to £143m. The figures for 2004 were also restated, with turnover falling
from £221m and pre-tax losses increasing from £1.8m.

The restatements at the time saw Sanctuary’s auditors Baker Tilly qualify the
group’s accounts. Shortly after securing a £110m financial rescue package, which
saved the company from suffering a serious loss of capital, Sanctuary dropped
Baker Tilly in favour of new auditors KPMG.