Select Committee on Standards and Privileges Seventh Report

The Previous Inquiry by the Committee

9.    The investigation carried out by the then Commissioner, Sir Gordon Downey, in 1998 related, amongst other things, to a complaint that Mr Robinson had failed to register a remunerated directorship with Hollis Industries plc, of which Mr Robinson was chairman between 1988 and 1990. The complainants cited in support of the complaint the fact that the company's published accounts for the relevant period showed chairman's emoluments of £200,000.

10.  The then Commissioner, in his memorandum to the Committee, referred to Mr Robinson's repeated denials that he had actually received any payment "for this position" (ie as chairman of Hollis Industries).

11.  Sir Gordon summarised the case against the allegation as follows:

    "(i)    Mr Robinson has denied receiving [this] payment and is prepared to have his personal bank statements examined to show that no payment passed into his accounts.

    (ii)  The accounts of the company [Hollis Industries plc] were qualified at the time by the auditors on the grounds that, until January 1990, the accounting records were not sufficient to enable them fully to verify the profit and loss account and the statement of source and application of funds.

    (iii)  Coopers and Lybrand[10] have confirmed that they were informed (probably in late November 1990) that the remuneration had not been paid; and they had no other evidence from which they could now determine whether or not a payment was made subsequently.

    (iv)  Mr Michael Stoney was the non-executive Director of the company who requested the then Financial Controller of Hollis to make provision in the accounts for a £200,000 management fee, payable to the Chairman. At Mr Robinson's request, Mr Stoney has examined the files held by Arthur Andersen, the administrators.[11] He found no trace of any remuneration having been made to Mr Robinson and concluded "I am satisfied that you never received the £200,000 from Hollis Industries plc, despite the entry in the account."

    (v)  This also accords with the analysis[12] produced by Mr Robinson's accountants, Wilder Coe."

12.  Sir Gordon's conclusion in relation to the complaint concerning the alleged payment to Mr Robinson's of £200,000 by Hollis Industries was as follows:

    "Although there can be no certainty on this matter, on the evidence I have seen I think the likelihood is that Mr Robinson did not receive payment of £200,000 and that the published accounts [of Hollis Industries] are in error. Certainly there is insufficient evidence on which to reach a contrary decision."

13.  After the then Commissioner had submitted his memorandum to the Committee, further documentary evidence came to light. In paragraph 5 of its Report the Committee described this additional information in the following terms:

    "In his letter of 7 July [1998] Mr Robinson drew our attention to certain papers found among Hollis's records in the possession of the administrators, namely an invoice to Hollis from Pergamon AGB plc ("Pergamon"), to which were attached two handwritten notes containing a reference to a payment to Mr Robinson. He unequivocally assured us that this remuneration was not agreed by him and that no payment to him was ever made. He also provided us with evidence that a payment (as compensation for loss of office) of the same amount disclosed in Pergamon's accounts related to another director and not to him: that his bank statements did not indicate any receipt, either directly or indirectly, from Pergamon; and that his directorship of Pergamon was unpaid."

14.  The Committee concluded in relation to the alleged payment of £200,000 to Mr Robinson:

    "We have received the clearest assurances from Mr Robinson that he did not receive the payment shown in the published accounts of Hollis. The statements of two firms of accountants support him. On the basis of the evidence we have seen, we believe the relevant entry in the published accounts is false, and we do not uphold the complaint."[13]

And the Committee added:

    "The state of affairs revealed by the Commissioner's investigation reflects poorly on the chairman, directors and others responsible for producing and approving Hollis's accounts and their accuracy."[14]

15.  Before reaching its conclusion, the Committee instructed its Chairman to write to Mr Robinson putting three specific questions to him:

    "(i)    Did you receive the £200,000 referred to in my earlier letter,[15] or any other benefit directly or indirectly in respect of your chairmanship of Hollis Industries plc, either in the accounting period in question or in any subsequent accounting period?

    (ii)  Did you expect to receive any benefit of any kind in respect of your chairmanship of the company?

    (iii)  Did you read the accounts of the company for the accounting period in question, and were you aware that they stated that the emoluments (excluding pension contributions) of the chairman of the company were £200,000?"[16]

16.  Mr Robinson replied as follows:

    "The answers to your questions are
    • No to all points;
    • No;
    • While I would normally read the accounts of every company with which I am associated, it is difficult after eight years to recall a specific set of annual accounts.

    If I had seen a mention of payments I had not received, I would, of course, have corrected this. But since I was not to be remunerated, this was not a point I was looking out for."[17]

10  Auditors of Hollis Industries plc.  Back

11  Administrators of TransTec, formerly Central and Sheerwood plc, appointed in December 1991. Back

12  Of Mr Robinson's personal tax files and bank statements. Back

13  Paragraph 7 of the Report. Back

14  Paragraph 8 of the Report. Back

15  A letter to Mr Robinson identifying the payment in question as chairman's remuneration of £200,000 from Hollis Industries plc.  Back

16  Eighteenth Report of Session 1997-98, Appendix 5.  Back

17  Ibid, Appendix 6 (excerpt). Back

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