RegulationAccounting StandardsOn the money

On the money

News this week that the Serious Fraud Office is investigating BAE will no doubt give its executives some concern. The media loves a good arms scandal and the UK has had its fair share in the past

But the stories this week put me in mind of Gerald James, the accountant
turned arms industry entrepreneur who got into hot water over events at his
company Astra. In fact, James made history – though not for his success in
running Astra. His fame, at least in accounting circles, came about because he
was charged by the Joint Disciplinary Scheme with falsifying an invoice, which
was to help the company gain a full stock market listing. But even that wasn’t
the landmark.

No, James’ little bit of fame came about because he insisted that journalists
were allowed in to his JDS hearing – the only time a JDS hearing has taken place
in public.

I was there to listen to proceedings. Astra started life making fireworks but
James had taken it down the road of producing military pyrotechnics. Then he was
accused of falsifying an invoice which overstated Astra’s profits threefold.
Sometime later the company went into receivership, and then he faced the
complaints.

James fought his defence tooth and nail, making allegations involving
politicians, UK security services and of illegal arms deals that were supposed
to have involved government agencies.

The proceedings were sometimes fantastic, sometimes grim. At one point he
brought his son in for moral support only for the poor teenager to spend the
hearing weeping throughout.

The allegations however, were the stuff that we have come to expect from an
arms scandal. It was all high risk, highly paid and with some highly dubious
decisions.

Sadly, it was a lesson in how being in the arms industry can literally blow
up in your face.

Gavin Hinks is the editor of Accountancy Age

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