ICAEW excludes former Kensington Group FD
Simon Kingdon also ordered to pay £20,000 in costs
By CFOWorld.co.uk staff | CFO UK | Published 11:40, 04 January 13
Former finance director of Kensington Group Simon Kingdon, once voted among the top 100 FDs by institutional shareholders, has been excluded from ICAEW membership following his failure to fully declare shareholdings during divorce proceedings.
As a result of Kingdon's non-disclosure, his ex-wife’s entitlement was lower than it should have been. She later discovered that he had sold some of his shareholding for £1.63 million.
Subsequently, she took him back to court and won an additional £481,000. Kingdon’s appeal against the order was dismissed and the ICAEW has not looked kindly on him either.
Kingdon separated from his wife in 2003 while he was Kensington Group’s FD. That year Kensington along with a select group of individual investors set-up a joint private venture – Money Partners Holdings (MPH) – to issue sub-prime mortgage loans.
In March 2004, divorce proceedings were started by his ex-wife and in August, Kingdon swore an affidavit giving “full, frank and clear disclosure of his financial circumstances”.
However, he failed to mention that he had acquired 10 percent of MPH’s issued shares (200,000 £1 ordinary shares) with an undocumented loan from Barclays in July 2004.
In October that year, Kingdon left Kensington and became FD of MPH. When probed by his wife’s legal team, he denied having any share options in MPH and again failed to disclose his shareholding.
In March 2005, Kingdon’s counsel filed a position statement stating that all the shares in MPH were held by Kensington and a group of investors and that he would “not have access to shares or share options”.
In November 2006, after a year of successful trading at MPH, Kensington decided to exercise its option to purchase around half of his shareholding for which he received £1.63 million.
After repaying the Barclays loan and taking into account tax and tax relief, he made a net gain on the disposal of £1.27 million.
His ex-wife only found out about the shares in January 2008 when the sub-prime bubble burst and MPH collapsed. Its share capital was sold for £2 and Kingdon resigned as a director. Subsequently, he was made redundant from the company in July 2008.
Although Kingdon admitted the non-disclosure to the ICAEW disciplinary committee tribunal, he pleaded that he had not been dishonest.
He said that the shares and the loan to acquire them represented neither a positive asset that required disclosure nor a liability that he was “subject to”. In financial terms, the position was effectively zero, Kingdon said.
However, the ICAEW disciplinary committee tribunal noted: “It is implausible that the defendant (Kingdon), in the midst of highly contentious divorce proceedings, assisted by solicitors and counsel and aware from the face of the document that he is completing that he must give full, frank and clear disclosure of all his financial and other circumstances, would take it upon himself, without taking any professional advice, to decide, for the reasons he has given in his evidence, not to disclose the acquisition of 200,000 shares at a par value of £200,000 and a personal loan from a bank of that amount to acquire them.”
“It is implausible because to a reasonable and honest mind this is the sort of substantial transaction which the court, and the other spouse, would clearly be entitled to be told about when considering ancillary relief,” it added.
“The tribunal places significance on the evidence that the defendant deliberately did not tell his solicitors about the share acquisition or seek advice in relation to it. His explanation that he had made the ‘nil value’ decision and thus considered he did not have to seek legal advice, is incoherent and unpersuasive,” it concluded.
Hence, the ICAEW deemed that lying in court proceedings was “objectively dishonest”, thereby excluding Kingdon from membership and ordering him to pay £20,000 in costs.
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