Assetco directors banned and fined for financial misconduct

THREE senior directors of Assetco, the company that leased fire engines to the London Fire Brigade, have been banned from the accountancy profession following a reporting scandal.

The Financial Reporting Council (FRC) said the decision had been made after a disciplinary tribunal found some members of the former management team were guilty of misconduct when preparing and approving the group’s financial statements for the years to the end of March 2009 and March 2010.

Assetco, an Aim-listed fire-and- rescue services business, had been forced to restate its financial statements in 2011 to correct a “significant overstatement of profits and assets”, the FRC found, causing a collapse in the share price and huge losses for its investors. The company was later bailed out and sold off its UK business in 2012 to focus on the Middle East. It is still listed on the London Stock Exchange.

“The dishonest conduct of management was concealed,” the FRC said.

The regulator had opened its investigation in 2014, bringing a total of 27 allegations against John Shannon, the former chief executive; Raymond Flynn, the former finance director; and Matthew Boyle, the former financial controller.

The claims were brought before a tribunal, which found all three were guilty of misconduct, dishonesty and “failing to act in accordance with core standards of integrity, objectivity and competence”.

The tribunal also found that they had each misled the company’s auditors, Grant Thornton.

Mr Shannon has been banned from practising for 16 years, Mr Flynn for 14 years and Mr Boyle for 12 years. Additionally, the three men have been ordered to pay fines of £250,000, £150,000 and £100,000 respectively.

Claudia Mortimore, the interim executive counsel at the FRC, said the misconduct of the three men was “the most serious the FRC has put before a tribunal”.

“In addition to the financial harm caused to the company and to many investors, the actions of these individuals have damaged public confidence in the profession,” she said.