Former iSoft pair face watchdog complaint
THE regulator for the accountancy profession has issued a formal complaint against two former senior executives of iSoft, the health sector software supplier.
Former chief executive Tim Whiston and ex finance director John Whelan will face an independent disciplinary tribunal this summer, the Financial Reporting Council said.
Whiston, from Lymm, Cheshire and Whelan, most recently of Cheadle near Stockport, were both cleared along with a third man, Steve Graham, of criminal wrongdoing after a fraud trial into iSOFT collapsed in 2013 .
iSoft was a one time darling of the stock market. Based first on Whitworth Street in central Manchester and then at opulent offices next to Manchester Airport, the company saw dramatic growth as it won a host of lucrative NHS contracts. After floating in 2000, its stock market value hit £1bn five years later.
In 2006 though, the wheels came off as the company warned on profits and said it had uncovered “accounting irregularities”. Its share price slumped some 90%, its headquarters moved to Oxfordshire and in 2007 it was acquired by an Australian rival, IBA Health.
In a statement regarding the latest probe, the Financial Reporting Council said it is investigating “the conduct of Timothy Whiston and John Whelan, members of the ICAEW, in relation to the preparation, approval and audit of the financial statements of iSoft for the years ended 30 April 2004 and 2005.”
It added: “The complaint alleges that the conduct of Timothy Whiston (former finance director/ CEO of iSoft Group Plc) and John Whelan (former European financial director/ group finance director of iSoft Group Plc) breached the fundamental principle of integrity and therefore fell significantly short of the standards reasonably to be expected of members of the ICAEW.
“The breaches occurred in relation to iSoft’s recognition of revenue and cash from a contract with the Irish South Eastern Health Board during 2003 – 2004.”
A spokeswoman for the FRC said the hearing would be held in public with Whiston and Whelan able to give their version of events.
Both could be fined, repremanded or suspended from membership of the Institute of Chartered Accountants, England and Wales, if the disciplinary tribunal finds against them.
In a statement John Whelan said he was “disappointed” with FRC’s decision to pursue its complaint.
He said: “It is a matter of public record that I was acquitted and cleared of any wrongdoing and it is important to note that in the judge’s summing up of the case, he referred to the inappropriate conduct of the prosecution and the fact that evidence has been presented in a manner which the prosecution knew, or ought to have known, was not correct.
“In addition, the judge instructed the jury to regard the evidence of several prosecution witnesses with caution as they may have been motivated to provide misleading evidence in order to protect themselves.
“Despite me providing detailed submissions to the FRC its conclusions refer to my conduct in 2005 when it is a matter of public record that I left iSOFT in 2004! I have no confidence that this process will be run in a fair and impartial manner.”
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Separately, it was reported by The Guardian that the FRC has dropped its investigation into the conduct of one of iSoft’s founders, Patrick Cryne, who was too ill to stand trial along with Whiston, Graham and Whelan.
