Almost eight years to the day after Atlantic Computers collapsed taking British & Commonwealth down with it after incurring debts of more than pounds 1.2bn, Rusty Ashman, B&C's former group finance director, says he at last feels vindicated and has described the Department of Trade and Industry's powers to investigate corporate failings as "intimidating".
A 36-day High Court hearing into an application by the DTI to ban six former directors ended with three directors being disqualified for between six and seven years and the remaining three - Mr Ashman, John Gunn, Atlantic's former chief executive and John Penny - being acquitted.
Three other directors had already agreed to disqualification under "carecraft" proceedings and been disqualified for between five and seven years.
B&C acquired Atlantic Computers in 1988, but a "black hole" was found in the accounts of the computer leasing company in 1989, which was not publicly revealed until 1990. A DTI investigation criticised Atlantic's auditors, Spicer & Oppenheim, and BZW, adviser to B&C. It also criticised some of the directors of B&C, who the inspectors said knew of a potential problem within Atlantic before they signed off the accounts in 1989 but who had decided not to investigate further before alerting auditors or the remainder of the B&C board.
The inspectors found no evidence of dishonesty on the part of the three B&C directors and no suggestion that anyone benefited personally from the collapse. When the report was published in 1994, the then Trade Minister Michael Heseltine announced all nine directors would be prosecuted but it was to be four years before the case finally reached the High Court as the defendants sought injunctions and battled to get the DTI to disclose documents.
It was to prove one of the longest and probably one of the costliest applications brought under the 1986 Companies Act, with hundreds of boxes of documents and exhibits filling more than 80 ring binders, and relying on the memories of witnesses of events going back 10 or more years - a fact not lost on the judge Mr Justice Lloyd, whose written judgment delivered last week ran to more than 150 pages.
Mr Ashman said: "There is a sense or relief. This has been hanging over me since 1990. The DTI investigation was complex and that took four years, but then they announced they would prosecute me. In my view that amounted to a de facto disqualification. I was absolutely stunned. I had rejected the inspector's draft report. I had denied many of the allegations against me, but I felt I never had an opportunity to test my case or to put my case in public. We were not dishonest.
"The DTI investigation was held in camera, and I was compelled to give evidence without knowing who my accusers were or even of what I was being accused. I was shown documents and asked to explain them without being given an opportunity to test the allegations.
"I think it most unfair. I am not opposed to city regulation and there has to be a way of investigating failures, but to appoint a QC and an accountant and then expect them to understand commercial practice is in my opinion wrong. I would prefer to see a businessman's panel, which will quickly review failures and then decide whether it was a commercial failure, a disaster or a fraud.
"With the publication of the report, I felt I was effectively branded as a liar and someone who had deliberately misled the auditors. I refuted that at the time, and last week Mr Justice Lloyd found in my favour."
Speaking of the disqualification procedure he said: " I feel the system is intimidating. It is the state against the individual and in my opinion they believe the individual will give in.
"They know that it will take a huge amount of energy and money to fight it and that most people will give up."
Mr Ashman who was unemployed for two years before returning to the City, did not qualify for legal aid and had three choices: to hire legal advisors which would have cost hundreds of thousands of pounds, to give up, or to fight and represent himself. He chose the latter and spent an estimated 4,500 hours over the next four years poring over documents and learning the mechanics of court procedure.
The DTI relied on the inspector's report which gave him the first opportunity to challenge the allegations made against him.
"Until then, the mechanics of the court was a complete mystery. I would work during the day, get home, snatch a meal and then work on the case until 11 or 12 at night and all weekend and on holidays. I even took some papers and read through statements whilst I was on the beach in Jersey."
He feels he has lost almost a decade of his life; at a time when most men are working towards the peak of their careers he was fighting to survive. " I am 48 and I feel I have lost the best years of my life. In your early 40's you have energy and expertise and experience, but now I look around and the finance directors of big companies are 36 or 37.
My children are now aged between 12 and 18 and for most of their lives they have seen me fighting this case. My wife and my family supported me and even in my darkest hour they knew I would win."
"I was very shocked and very upset by what happened at B&C. I am just pleased that I have at last had an opportunity to defend myself and my reputation."
While this case may be over, the B&C affair is far from closed. Mr Ashman, is a Fellow of the Institute of Chartered Accountants, and criticism in a DTI report can lead to a disciplinary hearing by the institute.
There is also a raft of civil claims and counter claims between the various professional advisors which is due to be consolidated in one major hearing in the High Court in 2000.Reuse content