Gavin James, finance director of struggling IT company iSoft, looks to be one
of the few senior executive directors that will survive an anticipated boardroom
clear-out after a series of accounting problems.
iSoft’s share price plunged by more than 20% last week when the company
announced that it was changing its accounting policies and would have to restate
pre-tax profits from around £22m to £7m for the 2006 financial year.
The problems and damaging restatement are almost certain to see iSoft pursue
a rescue rights issue and calls for chief executive Tim Whiston, the former FD
who was involved in the MBO of iSoft from KPMG in 1998, to step down.
James, however, looks set to survive as he has only been with iSoft since
April 2005. ‘Gavin James is far less vulnerable than the rest of the board
because he has only joined the company recently,’ one analyst said. ‘The real
focus is on Whiston.’
If James does survive at iSoft he will face a massive challenge to turn the
company around. Analysts believe that after the restatements the company will be
cash flow-negative for a number of years.
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