Harland chief's own firm used to refurbish HQ

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The Independent Online
HARLAND SIMON, the control systems group that will announce a sharp deterioration in its results today, is having building work done by a private firm that is 50 per cent owned by John Redshaw, Harland's managing director.

Industrial Radiographic Services has been erecting and demolishing partitions at Harland's Milton Keynes offices for the past two months.

Mr Redshaw owns one of the two pounds 1 shares which IRS has issued, according to documents at Companies House. The other belongs to Peter Thayre, his father- in-law. Mr Thayre is a director of IRS along with his daughter Sharron, Mr Redshaw's wife.

David Mahony, Harland's chairman, said he was unaware Mr Redshaw owned shares in IRS, though he knew that his father-in- law's firm was doing some work for the group. He said Harland entered into the contract on an arm's length relationship. Because work was being done on the floor that the executive directors use, 'we wanted to make sure we knew the people we were dealing with'.

Mr Redshaw was unavailable for comment.

Harland's shares have plummeted from 585p to 68p since its profits warning in February. Analysts expect Harland's annual profits to fall from pounds 10.5m to pounds 4m.

The company has said pounds 3m of the shortfall is due to problems at Perfect Information, a privately owned news cutting and financial information service to which Harland is substantially exposed.

Despite limited financial resources, Perfect is a major customer of Harland, paying for pounds 7.4m of equipment since March 1991. Perfect's purchase of an Opal computer system was aided by Harland's guarantee of a pounds 5m sale-and-leaseback agreement.

Perfect's recently filed accounts show that it is 'dependent upon the financial support of Harland Simon'. Harland used to own 50 per cent of Perfect, although this was converted into loan stock in a complicated refinancing last summer. Harland's small pension fund invested pounds 500,000 in Perfect at the same time.

Despite their interdependence, Harland has previously treated Perfect as neither a subsidiary nor an associate.

Yet Perfect's latest accounts are signed by George Neophitou, who recently became Harland's financial director, rather than by Charles Warner-Allen, Perfect's managing director and the only remaining director to have served in the year under review.

Mr Neophitou is described as Perfect's finance director. Its secretary is John Stobart, also secretary to Harland.

Besides the pounds 5m lease guarantee disclosed last year, Perfect's accounts reveal an earlier guarantee worth pounds 1.7m. This guarantee was withdrawn last July after little more than two weeks, though the accounts give no explanation.

In addition to the pounds 5m released by the sale and leaseback agreement, Perfect has also received the pounds 500,000 investment from Harland's pension scheme and a further pounds 2.45m from a Liechtenstein trust linked, it is believed, to Oerlikon-Buhrle, a listed Swiss company.

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