PracticeAccounting FirmsPolly Peck auditor a ‘scapegoat’

Polly Peck auditor a 'scapegoat'

Stoy Hayward was made a 'scapegoat' over Asil Nadir and the collapse of Polly Peck, according to the fugitive's UK lawyers.

Link: Polly Peck auditors ‘reprimanded’

They claim the evidence was not available to the professions disciplinary body when it ruled against the Polly Peck auditor last year.

The claims came as Nadir’s lawyers were in discussion with the Serious Fraud Office over arrangements for his return from northern Cyprus. He said it was now impossible for him to have a fair trial in Britain.

Last year, Stoy Hayward (now merged into BDO Stoy Hayward) was fined £75,000, and ordered to pay £250,000 towards legal costs by the Joint Disciplinary Scheme, over its role in Polly Peck’s collapse.

When Polly Peck closed in 1990 with debts of £550m, accounts at the time claimed to show assets of more than £900m. About £700m was ‘money owing’ from various Polly Peck subsidiaries in northern Cyprus.

Peter Krivinskas, the lawyer acting for Nadir, of Manchester-based solicitors David Phillips Krivinskas, told Accountancy Age: ‘If there’s ever a finding in court that these monies were never stolen, Stoy Hayward would have an opportunity to go back to the accountancy body and say your conclusions were wrong. Stoy Hayward found out what was happening, went over to northern Cyprus, saw what monies were coming in, saw that everything basically balanced and was happy with it.’

Krivinskas claimed that, rather than being stolen, the transactions in question related to effective money transfers to get round northern Cyprus’ currency exchange restrictions.

According to Krivinskas, key protagonists in the case that could verify Nadir’s side of the story have long since left the auditor or passed away, so the JDS did not have access to all the necessary evidence when it ruled against Stoy Hayward last year.

‘No one from the SFO or an accountancy body has actually been across to northern Cyprus to check whether these monies were paid in,’ he said.

During the eighties, investors believed Polly Peck was enjoying massive profit growth based on the performance of subsidiaries in northern Cyprus and Turkey.

A spokeswoman for BDO Stoy Hayward declined to comment.

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