News in brief.

UK profit warnings soared by 77% to 136 in the first quarter of 2001 according to Ernst & Young’s quarterly survey, a record increase.

Tough trading conditions were made worse by the poor winter weather, the foot-and-mouth epidemic and problems with transport systems. The rise in profit warnings exposed the fragility of the UK economy and tested the ability of British companies to respond effectively in a crisis, the survey said.

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Sir Iain Vallance, who has stepped down as chairman of British Telecom, is to take over from Sir Clive Thompson as deputy chairman of the Financial Reporting Council. The appointment, made jointly by trade secretary Stephen Byers and Bank of England governor Sir Edward George, came as Sir Iain prepared to hand over the reins at BT to BBC chairman Sir Christopher Bland. The FRC’s website is at

Grant Thornton has announced UK managing partner David McDonnell is to become chief executive of the firm’s worldwide operation from July this year. London and south-east region managing partner Michael Cleary is to step into McDonnell’s shoes in the UK. McDonnell, the firm’s longest-serving national managing partner, takes on a global operation of more than 600 offices with revenue in excess of $1.7bn (#1.18bn). He replaces Robert Kleckner who is retiring after 14 years in the post.

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Andrew Christie, professor of taxation at Heriot-Watt University, has officially taken over as president of the Institute of Chartered Accountants of Scotland. He will be supported by vice-presidents Cahol Dowds of Deloitte & Touche and Andersens’ Murdoch McKillop. Andersen-trained Christie takes over from Grenville Johnston, senior partner at WD Johnston & Carmichael. More information is available at

Property company London Town has been forced to restate figures in its published preliminary results. The company reclassified #731,000 made from ‘cost of sales’ to ‘share of joint ventures turnover’. As a result, group turnover was reduced by #741,000 and the cost of sales by #731,000.

Fee income was also reduced by 22%. The company says the adjustment had no affect on profits.

The London Town website is at

The ICAEW has announced an operating loss of #600,000 on revenues of #54.3m for 2000 in its annual review, bringing to an end four years of healthy growth in profits. The institute became the second professional body to fall into the red this year, after CIMA announced a deficit of #322,000 early in the week. David Shaw, treasurer of the ICAEW, said the institute was budgeting for ‘substantial losses’ in 2001 due to the use of reserves to fund a new database, education, training and local infrastructure.

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Organisers of the planned extraordinary general meeting to debate the ICAEW’s district societies’ re-organisation met with three society presidents on Tuesday in the run up to their crunch meeting with institute president Graham Ward today. Don Heady, the protest’s organiser, met with Brian Bush of the Thames Valley society, Richard Ranson of the Notts, Lincs and Derby society, and Mike Russell of the Birmingham and West Midlands society to discuss concerns over the district reorganisations. For updates on this story, visit

Sir John Bourn, head of the National Audit Office, has hit out at the poor management of European Commission finances. Reporting to parliament, Sir John highlighted significant weaknesses in the management of the European budget and the failure to counter the high rate of error in payment transactions. Sir John was also concerned at the delay in setting up the European anti-fraud office. More details can be seen at

The former head of Versailles has joined PricewaterhouseCoopers in suing Frederick Clough, the former FD of the collapsed trade finance company. Carl Cushnie is suing Clough for #13m alleging that Clough ‘misappropriated money’ from Marrlist, a company Cushnie set up in 1989, which owned 54% of Versailles. Versailles floated on the Alternative Investment Market in 1995 and grew to a market value of #630m by the time its shares were suspended in December 1999, after irregularities were discovered. Cushnie has denied any knowledge or involvement in the alleged fraud.

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