Property tycoon fined by ICAEW
Property entrepreneur fined £7,500 by the ICAEW over conflict of interest
A well-known property entrepreneur has been slapped with a £7,500 fine from
the ICAEW over a conflict
of interest he faced in the planned development of Fulham’s football ground,
Craven Cottage.
Nicholas Sutton, currently managing director for Imperial Property, told
Accountancy Age he was ‘disappointed’ at the ICAEW’s decision to fine
him. It also ordered Sutton to pay costs in the case of £10,707.
‘The decision is not right,’ he said.
When the opportunity arose between June 2002 and November 2002 to purchase
Craven Cottage stadium for £50m, Sutton failed to disclose it to Crown Dilmun,
the property development company where he was managing director.
According to the ICAEW, Sutton had been asked by a third party whether Crown
Dilmun was interested in the partial development of the football ground.
‘He failed to apprise Crown Dilmun of this opportunity and, instead, unknown
to them, used the information he had obtained for his own purposes, resulting in
an arrangement whereby a company he partly owned stood to benefit from the
development of the ground,’ ICAEW papers say.
Sutton had earlier been sued by Crown Dilmun over the conflict of interest.
He lost the case in the High Court for acting in breach of his contractual
and fiduciary duties.
The ICAEW said the complaint filed against Sutton had been proved and made no
further finding against him.
The institute took into account the previous court finding against Sutton. It
also considered the fact that his solicitor failed to alert him to the high
risks he was running at the time of entering the deal to purchase the football
ground.
‘It is to the defendant’s credit that when it was eventually pointed out to
him that his actions were not appropriate, he stood aside and allowed his
employer an opportunity to take the deal (which it declined and thus, it
appears, has suffered no financial loss)… it is noted that any harm that may
have been caused by the defendant’s actions has already been redressed by the
High Court,’ the ICAEW said.