QMH director to face tribunal
The profession's senior watchdog has laid complaints against the former director of collapsed hotel group Queens Moat Houses claiming that he provided false information about the group's financial position.
Accountant Martin Alan Marcus will face a Joint Disciplinary Scheme tribunal for, among other things, ‘his failure to prepare accounts for the year 1991 which gave a true and fair view’ and for ‘his involvement in providing inaccurate and misleading information to analysts’.
A JDS tribunal will be appointed to hear the complaints and its report will be made public.
Former chairman of Chelsea Building Society Maurice Hart was thrown out of the ICAEW in March 2001. He was also ordered to pay £50,000 in costs for his role in the accounting scandal at Queens Moat.
In 1991 auditors Bird Luckin signed off QMH’s accounts with a reported pre-tax profit of £94.1m as ‘a true and fair view… of the profit of the group’.
A JDS tribunal found that in fact the profit was the result of ‘inappropriate accounting policies or the misapplication of the accounting policies stated in QMH’s accounts’.
Other devices used to inflate profits included capitalising interest on the acquisition of hotel assets and managing the group’s hotels through separate companies and paying QMH an annual fee.
Investigators found 67% of the company’s profits for 1990 ‘could not be justified on a true and fair basis’.
In March 1993, QMH’s listing was suspended at the company’s request. Its market capitalisation at that date was £728m. Under new management, the accounts for that year reported a loss of £1,040.5m.