Bankruptcy judgment takes accountant by surprise: Inland Revenue petition means automatic expulsion from institute for a senior partner of top 20 auditing firm

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The Independent Online
A SENIOR partner of a top 20 firm of chartered accountants has been bankrupted by the Inland Revenue, apparently without his knowledge.

The bankruptcy order against Thomas Lowndes, senior partner of Kidsons Impey in Chester, was made by Mr Registrar James on Monday and the Official Receiver has taken legal control over all Mr Lowndes' assets.

Yesterday the accountancy firm said that it and Mr Lowndes were unaware of the order. A receptionist at the Chester office said he had 'been out all afternoon'.

The implications of bankruptcy are particularly serious for chartered accountants since they are automatically expelled from their professional bodies, the Institutes of Chartered Accountants, and barred from auditing company accounts - the bread and butter of the profession.

The news of Mr Lowndes' bankruptcy - he qualified as a chartered accountant in 1969 - apparently came as a complete surprise even though the bankruptcy petition was presented to High Court in July last year. The receptionist at the Chester office said: 'What? You must have the wrong man.'

Later the firm's London office issued a brief statement: 'Mr Lowndes was unaware that the bankruptcy order had been made and confirms that all debts will be paid in full, and that an immediate application for annulment will be made.' The firm said it was unaware of the size of the debts.

A spokesman for the Institute of Chartered Accountants in England and Wales said he had not heard of the case, but confirmed: 'As soon as he is made bankrupt he will automatically have ceased to be a member of the ICA - from the moment of the judgment.'

This means he would only be able to carry on auditing if also authorised by another body, such as the Chartered Association of Certified Accountants. He may reapply to rejoin the insititute once he has been discharged from bankruptcy, which takes at least two years. The spokesman said that not many chartered accountants had gone bankrupt.

Some of the effects of bankruptcy are that the Official Receiver, a government employee, will be able to enter his property and sell assets for the benefit of creditors. The bankrupt will not be able to obtain credit over pounds 250 unless he discloses that he is bankrupt, and he will have to keep the Official Receiver fully informed of his earnings.