Harland cash crisis ends with receiver

Click to follow
The Independent Online
TOUCHE ROSS was yesterday appointed as receiver to Harland Simon, the control systems group, after Barclays Bank refused to release further money to pay staff.

Harland's troubles came to a head on Thursday when Barclays bounced the monthly salary cheque. Harland's discredited management had hoped to pay its 800 UK staff a few days late. Barclays began the final chapter of Harland's downfall when it refused to release pounds 8.1m of disposal proceeds last month.

Nick Lyle, a Touche partner, said he and Roger Powdrill would try to sell the trading subsidiaries - not in receivership - to preserve 'as many businesses and jobs as possible'. Several big companies have already shown an interest.

Meanwhile, the Independent has seen a copy of Price Waterhouse's post-audit report to Harland's board, which sheds light on some controversies surrounding the company. It reveals:

Harland 'organised and funded the set-up' of Sandford Etablissement, the Liechtenstein trust at the heart of some of Harland's most serious problems. Price Waterhouse reports that prior to its final 1992 audit 'we had been told that the group had not been involved in any way in the establishment of the trust'.

The payment to Roy Ashman, Harland's former chairman, of pounds 960,000 from the group's pension scheme - a fund of only pounds 6m or so. This is in addition to the pounds 360,000 compensation that Mr Ashman received when he was sacked in February.

Cash advances totalling pounds 53,000 to John Redshaw, Harland's former managing director, 'for which expense claims had not been formally signed by the then chairman, (Mr) Ashman, at the year-end'. George Neophitou, Harland's finance director, assured Price Waterhouse these amounts represented valid expense claims. Mr Redshaw left Harland last month after several weeks' absence from its offices.

Sandford's importance is its ownership of a large stake in Perfect Information, an on-line news cutting service in which Mr Ashman and Harland own shares. Harland's accounting treatment of Perfect enabled it to boost 1991 group profits by up to pounds 2m. Doubts over ownership and control of Perfect prompted PW to qualify Harland's 1992 accounts.

The PW report reveals that Sandford gave Julia Nightingale, Harland's former assistant company secretary, 'a very wide-ranging power of attorney over the Sandford shares in Perfect in February 1992'. Counsel had been unable to decide whether Harland had, through Mr Ashman, 'exercised a dominant influence or control over Perfect'.

The PW report is dated 21 July. A week later Harland stated: 'At no time during the period of its interest in Perfect did Sandford look to Harland Simon for instructions. . . . The (Sandford) shares were not at any time held for the benefit of any company in the Harland Simon Group or for any of its directors or officers.'

Comments