Accountant's cut is the deepest

Keeping tabs on the millions can be hard for a rock megastar.

LEGAL NOTE: Legal Message: Complaint by Mr Christopher Burley, Solicitor. See letter published in Independent 20th October 1995.



Mary Braid reports Robert Palmer: Another star said to have lost cash

Following the trial of his accountant, Keith Moore, Sting will probably be forever known as the superstar who was fleeced of pounds 6m and was too rich to notice.

Such an oversight - even over a period of four years - astounds the man in the street. But not all those involved in the business side of rock and roll are as shocked by the story. While one leading music industry accountant said he was "quite frankly flabbergasted" that Sting and his other close advisers - his manager, Miles Copeland, and lawyer, Christopher Burley - failed to spot the huge fraud, others in the industry barely raised an eyebrow.

"This could happen remarkably easily," said Ed Bicknell, manager of the similarly rich and successful rock group Dire Straits. "It doesn't surprise me at all. What does surprise me is that it doesn't happen more often."

Just how often it does happen is difficult to gauge. Scandals do occasionally blow up. Last December, operations were suspended for two weeks at Casson Beckman, an accountancy firm, after John Goldring, a partner, resigned following "apparent financial irregularities" believed to involve pounds 2m. The rock star Robert Palmer was among the clients who were reported to have lost money.

Six months earlier, an investigation - still ongoing - was launched into the showbusiness accountants Stainton Shafto, reportedly involving pounds 6m belonging to Rick Wright of Pink Floyd.

But often clients and accountancy companies are both keen to hush things up, particularly if the money is fully recovered and criminality looks hard to prove - and it often is. The Metropolitan Police were delighted yesterday by the success of an "extremely complex and protracted" inquiry that involved a team of forensic accountants and litigation solicitors sifting through 17 years of financial records.

Mr Bicknell said the four-week trial gave a rare insight into the complexity of music industry finance and the burdens it places on artists who have previously had little interest or experience of business, and are too busy making money and touring to develop expertise.

In court Sting described how, almost overnight, he went from pounds 16-a-week benefit to head a multi-million-pound multinational corporation. He said that he had 47 different accounts relating to his solo career and 108 in total. His annual earnings have been estimated at pounds 7m.

Mr Bicknell described how, as stars perform live across the globe for months on end, money pours in from record and publishing royalties and ticket sales and merchandising, often long after it was earned. It floods out again in taxes and huge touring costs.

"The situation is very fluid," he insisted. "When artists say they don't know what they are worth they are telling the truth."

But a music industry accountant was dissatisfied with the analysis. "I'm surprised Sting isn't more sophisticated after all these years,'' he said. "You might not notice the odd pounds 100,000 going missing but this is a huge sum even over four years. Where were his lawyer and manager? They usually work very closely with the accountant and the artist.

"I can't understand why he had so many accounts or why he appears to have had such a poor handle on his affairs."