PracticeConsultingCoopers fined £100,000 over Resort

Coopers fined £100,000 over Resort

An accountants' Joint Disciplinary Tribunal has fined Coopers & Lybrand £100,000 over its involvement with Resort Hotels, the leisure company which suffered a serious fraud by its managing director.

At the same time, the tribunal fined former Coopers partner Alun Thomas £5,000, severely reprimanding the auditor over his failings at Resort.

The tribunal upheld 14 of the 15 complaints made against Coopers but rejected a charge of dishonesty against the firm, Alun Thomas and former Coopers senior manager Mark Harwood.

Problems at Resort, which went into receivership in 1993, stemmed from frauds carried out by its managing director Robert Feld, who was sentenced to eight years imprisonment in 1997, reduced to six on appeal.

Coopers & Lybrand, now part of PricewaterhouseCoopers, was the auditor at the time, and also acted as reporting accountants for Resort’s rights issue in 1992.

The fraud centred on documents forged by Feld, including two paying-in slips, which related to profitability of the company.

His actions subsequently misled shareholders who subscribed to the £20.6m rights issue and also the auditors later in 1992.

In a statement, PwC said: ‘We regret that Coopers & Lybrand’s work for this client fell below its usual high standards.’

The firm added that it had never accepted the complaint of dishonesty made against the firm and the individuals involved and was please that the tribunal had found the complaints ‘unjustified and unfounded’.

Last month, a Joint Disciplinary Tribunal severely reprimanded Roland Lewis, the former finance director of Resort, ordering him to pay £15,000 costs.

The tribunal was critical of the time taken to reach a hearing, but the Joint Disciplinary Scheme, which investigates the conduct of accountants, said the case had only been referred to it in November 1997 and that the time taken to reach a hearing in February 2001 was not unusually long.

The JDS’s website is at www.castigator.org.uk

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