The report also revealed three senior accountants were at the helm of TransTec during the period of a huge contingent liability to Ford, according to a bombshell interim DTI report.
Richard Carr, who took over from Robinson as chief executive in 1994, and financial director Richard Jeffrey are described as ‘dominant figures’ in the inspectors’ report. Richard Parkin, a former audit manager with Coopers and Lybrand, succeeded Jeffery as FD a few months before the group went into administrative receivership in December 1999.
The three are said to have supplied most of the information to the board in the years leading up to the group’s collapse.
Transtec folded in December 1999 following a compensation claim by carmaker Ford, which used the engineering company’s plant in Campsie, Northern Ireland to supply cylinder heads. Ford demanded compensation when the cylinder heads failed to meet the standards they required and settled for payment over three years.
The DTI’s key interim finding was that Robinson and non-executive directors were kept in the dark about the reported £12m Ford claim along with auditors, advisers, brokers and the Stock Exchange.
It revealed the liability as the immediate cause of the collapse but complained of the group’s ‘aggressive’ accounting practices, tending ‘to anticipate profits or defer expenditure’ and apply ‘euphemisms’ to items in the accounts.
Co-authors of the report Hugh Aldous FCA and Roger Kaye QC made it clear they were publishing now – six months later than planned – because of the election expected this spring and insisted they were not yet ready to allocate blame. They complained of delays obtaining vital documents and said ‘many questions still remain apparently unanswered…not least among these is the role of the auditors and directors’.
The inspectors disclosed they were ‘still interviewing representatives from the auditing firm and have not completed interviews of the directors’.
The Accountants’ Joint Disciplinary Scheme is currently undertaking an investigation into Transtec’s former auditors, PricewaterhouseCoopers, as well as former Transtec directors who were chartered accountants.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel