Sir Richard Branson, the Virgin entrepreneur, and Richard Bowker, his sidekick who has been appointed chairman of the Strategic Rail Authority, are in danger of being fined for being directors of companies that are late with their accounts.
Companies House requires accounts to be filed within 10 months of a company's financial year end. If the date is missed, and no extension has been granted, the companies can be struck off or their directors fined. Sir Richard is a director of 13 trading companies in breach of the rules. These include Virgin Management, which provides management services to the other groups in the Virgin empire such as Virgin Atlantic and Virgin Rail, which is so far behind on its records that its last accounts cover only the period up to 31 January 1999, a year when it lost £27.5m.
Other companies behind in their records include Virgin Direct, the financial services business which Virgin owns jointly with Australian financial group AMP, and four of its associated companies, which were to file accounts last week. The holding companies for Virgin's hotels business and his round-the- world ballooning expeditions have also yet to file up-to-date accounts. Mr Bowker, whose appointment as SRA chairman last month brought accusations of conflicts of interest, is also a director of Virgin Management and five other businesses whose accounts are out of date. He has quit as a director of Virgin Rail and is to resign his other directorships before joining the SRA in December.
A spokesman for Virgin said the filing of the accounts was the responsibility of Philip Gram, who is on the board of some 249 companies, most controlled by Sir Richard. He said the Virgin Direct business was being reorganised, so an extension has been sought from Companies House. Lack of accounts at Virgin Management was "a cock-up". The absence of up-to-date accounts means anyone doing business with Virgin companies cannot obtain an accurate assessment of their financial position. The group is involved in complex financial deals, particularly in the transport sector. Next week it will put forward a plan to merge the no-frills arm of the Belgian airline Sabena with Virgin Direct, the cheap and cheerful airline which has just returned to profit. Sir Richard plans to put $20m (£14m) into the venture. But the collapse of Sabena, which is already in administration and may move to full-blown bankruptcy this week, could scupper this deal.
Virgin Rail is also trying to reach a deal to secure the upgrading of the West Coast line, which hit trouble before Railtrack went into administration. There is a proposal to save up to £1.5bn by delaying the final stage of the scheme but Virgin Rail says this would mean it has to have nine extra trains at a cost of £100m and that it wants the Government to cover this cost.Reuse content