Fisons chief will not act on share option revelations

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The Independent Online
PATRICK EGAN, chairman of Fisons, does not intend to take any action over revelations that former management of the troubled pharmaceuticals group made millions of pounds on share options whose value was boosted by the company's legal manipulation of profits, writes Paul Durman.

Mr Egan said yesterday: 'I am not aware that they have done anything illegal.'

Fisons last week revealed that for years it had boosted profits by discounting drugs towards its year end to enable it to take a very high profit on sales. Mr Egan's decision to end this practice of 'trade loading' played a large part in wiping out the pounds 100m of profits that Fisons was expected to make in 1993.

John Kerridge, Mr Egan's predecessor, Cedric Scroggs, sacked as chief executive last week, and other executive directors made about pounds 2m in 1991 when they exercised share options granted at 253p, almost half the then market price of 491p.

In 1990, trade loading added about pounds 50m to pharmaceutical profits, which totalled pounds 151.7m. Without this measure, group profits and Fisons share price would have been lower, reducing the value of share options to management.

Mr Egan said he was assured by management that the increased year- end sales reflected the seasonality of the business. 'I discovered last year that there is an element of seasonality, but it's been grossly exaggerated by this trade loading.'