FSA lets Connaught off the hook

FSA lets Connaught off the hook


The executives at the centre of the Connaught collapse will not face action by the FSA, according to a report in The Times. 

The regulator said: “The FSA investigated various circumstances surrounding the collapse of the company but has not found sufficient evidence to take action against any director or senior manager of Connaught.”

Yet The Times suggested that “The FSA’s decision to close the case is unlikely to quell questions about the conduct of senior managers in the run-up to Connaught’s collapse.”

Investigations were launched when Connaught entered administration in 2010 after it was alleged that it used accounting practices to ‘flatter’ its profits, to make it appear as though it was in a healthy financial position when, according to a former accountant, it was in fact “losing cash hand over fist”.

Concerns were also raised about alleged false statements made by senior managers or directors to the market and the selling of shares which may have contravened guidelines.

The Times stated that the investigation focused upon the company’s founder, Mark Tincknell and former chief executive, Mark Davies.

The regulator, however, found no evidence of this.

In September 2010 shares were suspended and KPMG was appointed; This Is Money further reported that administrator David Costley-Wood had found 50,000 unpaid invoices in boxes at Connaught’s Leeds office. 

It was also confirmed that, during the administration, 1,400 jobs were lost and unsecured creditors were owed £40 million at the time of the firm’s collapse.

Though at Connaught’s peak in 2009 its turnover was £659.6 million, the value of its shares fell by 95 per cent between June and September 2010 following a profit warning. 


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