SBG continues to pay former director on monthly basis: Photocopier sales chief who resigned still runs company car

SOUTHERN Business Group, the photocopier leasing company, admitted yesterday that a former sales director who resigned in February to take responsibility for 'improprieties' was still receiving money on a monthly basis.

Roger Limpenny, joint managing director, also confirmed that Neil Redding was still using his company car and had 'very infrequently' come into the office since his resignation to help with certain contracts.

Mr Limpenny denied that Mr Redding was about to rejoin the company, where until February he had been a main board director responsible for sales staff. He resigned after the company admitted that staff at a subsidiary, Benworth, had tampered with photocopier meter readings.

According to Mr Limpenny, Mr Redding's monthly payments are part of a negotiated settlement, the terms of which will be disclosed in Southern's report and accounts next January. He denied that it was unusual to pay compensation on a monthly basis.

He said that Mr Redding had been allowed to keep his car as he was not in a position to buy his own. Although Southern is still insuring the car it is no longer paying for petrol. The car is due to be returned 'before Christmas'.

Shares in Southern fell 17p to 113p in February after the company admitted that six of its salesmen had acted fraudulently to inflate their commissions. They tumbled a further 34p to 79p after a consumer group, the Campaign to Clean up Copier Contracts, called for the company to be investigated by the Office of Fair Trading.

The OFT is investigating the office machinery leasing industry, focusing on 'cost per copy' contracts that have been criticised as being deliberately inflexible, too long and expensive.

The industry has also attracted interest from two big American companies, Alco Standard and Danka. Alco recently bought Erskine House, a rival copier company, while Danka, which has a London stock market quote, made its first UK move last month with the acquisition of Saint, a Hull-based photocopier leaser.

Alco and Danka say the photocopier industry in the US has avoided the poor reputation it has here by shunning 'cost per copy' contracts. Southern shares closed yesterday at 65p.