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01 February 2010

Ex iSoft directors head to crown court

 Four former iSoft directors will stand before crown court next week following the start of criminal proceedings against them at City of Westminster Magistrates’ court today.
According to press reports, the four men have been granted unconditional bail and are due before Southwark Crown Court on February 5.
Patrick Cryne, the company’s former chairman, Timothy Whiston former chief executive, and Stephen Graham and John Whelan former directors, are accused of conspiracy to make misleading statements contrary to section 397 (1)(a) and (2) of the Financial Services and Markets Act 2000 and section 1 of the Criminal Law Act 1977.
The charges relate to changes in revenue recognition policy at iSoft and a series of profit warnings, combined with failure to achieve promised delivery targets, saw iSoft’s share price drop by 90% in 2005-06.
The dramatic collapse raised questions about lucrative disposals of shares by the company directors in 2004.
The ensuing financial crisis and collapse in investor confidence meant the company was sold off to Australia’s IBA Healthcare for £166m in October 2007.
On 6 January the Financial Standards Authority confirmed that it had commenced proceedings against the four men.
It also announced that it had discontinued its investigation into iSoft Group plc under S 397 of the Financial Services and Markets Act 2000.
Following the commencement of proceedings Cryne said in a statement: “Since the FSA commenced its investigation into the affairs of iSoft in July 2006 it has had my full and complete co-operation.
“I am surprised and disappointed at the position arrived at by the FSA. I am however absolutely satisfied that in due course my position will be completely vindicated.”