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News September 2005 The Mayflower Corporation Plc

The Mayflower Corporation Plc

14 September 2005
AIDB PN 5

The Executive Counsel of the AIDB has conducted an investigation into the conduct of : PricewaterhouseCoopers LLP (“PwC”) and Arthur Andersen (“Andersen”), both former auditors of The Mayflower Corporation Plc (“Mayflower”); David Thomas Donnelly, the former Finance Director; and Ian Jon Shelton, a former employee of one of Mayflower’s principal subsidiaries, Transbus International Limited (“Transbus”).

Following the investigation it has been decided to file disciplinary complaints against PwC and Mr Donnelly.

The Complaint against PwC relates to the following matters:
  1. Their audit of the 2002 Transbus accounts and, in particular, amounts held on behalf of a bank under an invoice discounting facility;
  2. Their audit of the 2002 Mayflower accounts and disclosures relating to the company’s ability to continue as a going concern beyond 31st December 2003.

The Complaint against Mr Donnelly relates to the following matters:
  1. Disclosures in the 2002 Mayflower accounts relating to the company’s ability to continue as a going concern beyond 31st December 2003.
  2. The refinancing of the Group’s banking facilities at the end of 2003 and the failure to disclose the discovery of accounting irregularities at one of Mayflower’s principal subsidiaries.

The complaints will be heard by an independent Tribunal to be convened shortly.

No complaint will be filed against Andersen.

The investigation relating to Mr Shelton is currently being finalised and the outcome of that part of the investigation will be announced separately.

Notes to Editors
  1. The Financial Reporting Council (FRC) is a unified, independent regulator. Its mission is to promote confidence in corporate reporting and governance. The FRC incorporates five operating boards: the Accounting Standards Board, the Auditing Practices Board, the Financial Reporting Review Panel, the Accountancy Investigation and Discipline Board and the Professional Oversight Board for Accountancy.
  2. The Accountancy Investigation and Discipline Board ("AIDB") is the independent, investigative and disciplinary body for accountants in the UK. The AIDB is responsible for operating and administering an independent disciplinary scheme (" the Scheme") covering members of the following accountants’ professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy and the Institute of Chartered Accountants in England and Wales.
  3. The focus of the AIDB is on cases which raise important issues affecting the public interest; other disciplinary cases will continue to be dealt with by the individual accountancy body of the member concerned.
  4. Disciplinary Complaints filed following an AIDB investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a Complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body and withdrawal of practising certificates or licenses.

Document created under a former FRC operating body.

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