UK FRC files complaint over Farepak collapse
Accounting watchdog hauls European Home Retail's ex-CEO
By CFOWorld.co.uk staff | CFO UK | Published 13:00, 11 December 12
UK Financial Reporting Council (FRC), the country's accounting watchdog has filed a complaint against William Rollason, the former CEO of European Home Retail (EHR), for breach of accounting rules related to the collapse of Christmas savings club Farepak.
In a statement, the FRC said, "Rollason had drafted and distributed to his fellow directors of EHR a memorandum on 2 February 2006, which he knew was misleading and did not reflect the financial position of EHR."
It also said Rollason that had "signed a letter on 7 February 2006 on behalf of EHR to Farepak stating that EHR would continue to support Farepak to enable it to meet its liabilities as they fell due, which he knew was misleading."
The FRC also investigated other European Home Retail and Farepak employees. However, it decided not to pursue a formal complaint against them. The UK government abandoned its bid to have Farepak's former directors barred from serving on a board again in June.
Farepak, a subsidiary of EHR, ceased trading in October 2006 owing £37 million to 120,000 customers. The FRC's complaint would be ruled upon by an independent disciplinary tribunal which holds the power to impose fines.
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