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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