News December 2012 Outcome of the investigation into the conduct of: Mr William Rollason, Member of ICAEW and other mem

Outcome of the investigation into the conduct of: Mr William Rollason, Member of ICAEW and other members of professional accountancy bodies who were employed by European Home Retail plc. and Farepak

10 December 2012

FRC PN 026

European Home Retail PLC/ Farepak Food & Gifts LTD
The Financial Reporting Council’s Executive Counsel has filed a disciplinary Formal Complaint in relation to the conduct of Mr William Rollason as director of European Home Retail plc (“EHR”) and of Farepak Food & Gifts Ltd (“Farepak”).

The Formal Complaint alleges that the conduct of Mr Rollason, who joined the company in January 2003 and was Chief Executive of EHR and a director of Farepak, fell short of the standards reasonably to be expected of ICAEW Members in that he failed to act in accordance with the ICAEW Ethical Code principle that a member should behave with integrity in all professional and business relationships. The Formal Complaint alleges that Mr Rollason:

  • Drafted and distributed to his fellow directors of EHR a memorandum on 2 February 2006, which he knew was misleading and did not reflect the financial position of EHR.

  • Signed a letter on 7 February 2006 on behalf of EHR to Farepak stating that EHR would continue to support Farepak to enable it to meet its liabilities as they fell due, which he knew was misleading.

  • Signed the financial statements of Farepak for the period ended 28th April 2005, which he knew were misleading in that it was stated that EHR would continue to support Farepak to enable it to meet its liabilities as they fell due and accordingly the going concern basis had been adopted for the financial statements.   

An independent Disciplinary Tribunal has been appointed to hear the Formal Complaint.

Notes to editors:

  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.

  2. In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:

  3. The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.

  4. Investigations are conducted by Executive Counsel and the Professional Discipline team within the Conduct Division. If disciplinary proceedings are to be commenced, Executive Counsel will deliver a complaint to the Conduct Committee. The Conduct Committee will then instruct the Convener to appoint a Disciplinary Tribunal.

    • Decision to investigate

    • Investigation

    • Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal as is announced here

    • Tribunal hearing

    • Determination and imposition of sanction and/or costs orders

  5. The FRC initially investigated the conduct of William Rollason and other employees of EHR/Farepak who are members of professional accountancy bodies. Following consideration of the investigation and the guidance on delivery of Formal Complaints, Executive Counsel decided not to pursue a Formal Complaint against other individuals whose conduct had been under investigation.