HCL suspends founder after accounting fiasco

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The Independent Online

The medical staffing specialist Healthcare Locums has halted trading in its shares and suspended its founder and finance director after the board found what it called "serious accounting irregularities".

The London-based company also warned that its profits would be "materially below market expectations" of between £22m and £25m for the year to 31 December.

Shares in the Aim-listed group were suspended at 112.5p, a precipitous decline from the 12-month high of 273.5p they reached last January.

HCL, which supplies staff to social services departments and hospitals, said: "Serious accounting irregularities have been brought to the attention of the board, as a result of which the company will be carrying out an immediate investigation to consider the financial implications."

In addition to its finance director Diane Jarvis, HCL suspended its executive vice-chairman Kate Bleasdale, who founded the company in 2003 and holds a 10.7 per cent stake, pending the outcome of the internal inquiry. But Ms Bleasdale – a former nurse who has received entrepreneur of the year awards, as well as winning a sex-discrimination case at her former company – hit back. She said: "I am shocked and disappointed by the board's decision. I dispute the suggestions made by the company and will seek to be reinstated as soon as possible. My focus has always been, and remains, the interests of the business and its shareholders."

Ms Jarvis was unavailable for comment.

The HCL chairman Alan Walker has taken over the running of the firm on an interim basis.

In an earlier embarrassment last March, the healthcare company chose to restate its previous year's results to reflect a change in its accounting policy, which was related to the date of revenue recognition on permanent placements.

The hedge fund Toscafund Asset Management owns 10.2 per cent of HCL. As recently as 26 November, Ms Bleasdale unveiled HCL's £75.2m acquisition of Healthcare Australia.

At the time, she said: "This acquisition is expected to create one of the largest specialist international health and social care staffing agencies in the world. Importantly, it will enable HCL to further reduce its reliance on UK public sector spending."

HCL derives about half its business from the NHS and the rest from other areas, including in the US, the Middle East, Australia and Canada. It made a pre-tax profit of £6.8m in the six months to 30 June 2010, compared with a restated £8.6m the previous year. Its revenues fell to £76.4m over the period.

Yesterday's developments mark another chapter in Ms Bleasdale's career. After training as a nurse, she founded Match Group in 1986 with £7,000 and grew it into one of the largest UK medical staffing agencies with sales of £120m in 2000. But after alleging sexual discrimination and unfair dimissal at Match she won a record out-of-court settlement for £2.2m in 2002. She said male colleagues had questioned her ability to lead the company, and that she received explicit emails and other forms of harassment from fellow directors.

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