English ICA pushes for Queens Moat inquiry

The English ICA is set to launch its own investigation into the role played by auditors Bird Luckin in the z1bn losses suffered in 1992 by hotels group Queens Moat Houses.

Fifteen-partner firm Bird Luckin was sacked by Queens Moat in June 1993, after the beleaguered company had been forced to reveal large-scale accounting irregularities that led to the suspension of trading in its shares and property write-downs worth more than z800m.

Matthew Ives, English ICA director of professional conduct, confirmed to Accountancy Age this week that the institute still wanted to investigate the case, despite having failed to act for more than three years since the incident – one of the UK’s largest corporate losses – came to light.

The institute has so far delayed its investigation in the hope that the Department of Trade and Industry, which has also been conducting an enquiry since November 1993, would refer the case to it.

But the DTI inspectors, led by Binder Hamlyn senior partner Adrian Burn and barrister Patrick Phillips, have so far racked up costs of more than z2.5m without yet announcing any results.

The institute met DTI officials a few days ago in an effort to improve dialogue, and is now considering whether to continue to wait for the inspectors’ referral or to press ahead on its own.

Any investigation is likely to be extended beyond the role of the auditor to include the activities of the four chartered accountant former Queens Moat directors: Martin Marcus, deputy chairman and joint managing director; David Hersey finance director; Allan Porter, deputy finance director; and non-executive Maurice Hart, who is an ex-senior partner at Bird Luckin.

Coopers & Lybrand, which took over the Queens Moat audit from Bird Luckin, heavily qualified its predecessor’s last set of accounts in 1991 because of concern over the true worth of the property valuations and confusion over the company’s accounting policies.