DTI issues damning report on Edencorp

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The Independent Online
A DAMNING report on the affairs of Edencorp Leisure, the former operator of leisure parks in the UK and Portugal that went into receivership in 1991, was published yesterday by the Department of Trade and Industry, writes John Shepherd.

Michael Wallace, former chairman and chief executive, has been accused by the DTI inspectors of withdrawing 'large sums' from group companies without the board's knowledge. John Cook, the former finance director, is said to have been 'negligent in carrying out his professional duties'.

The inspectors cannot quantify the amount of money withdrawn by Mr Wallace because there is 'no indication' as to which drawings were authorised.

The DTI is considering action that could lead to both of them being disqualified from holding directorships. However it does not plan criminal proceedings.

Anthony Fausset and David Dean, the inspectors appointed in October 1991, also criticised Ernst & Young, auditors to Edencorp.

The report says stated pre-tax profits for 1989 of pounds 826,000 included 'what appear' to be advance sales of at least pounds 200,000.

The reports says no attempt was made by Mr Cook to quantify those sales. And the auditors 'appear to have given no consideration to the implications of the advance sales in signing an unqualified report on the accounts'.

The three former non-executive directors were also criticised. The report says Roy Parry, Donald Robinson and Andrew Short did not take a united stand over the absence of financial information.