LONDON Dec 10 Britain's accounting watchdog has
filed a complaint against the former chief executive of European
Home Retail for a breach of accounting rules related to the
collapse of Christmas savings club Farepak.
Farepak Food & Gifts, a subsidiary of European Home Retail,
ceased trading in October 2006 owing 37 million pounds ($59.28
million) to 120,000 customers.
The Financial Reporting Council (FRC) said that following an
investigation it had filed a formal disciplinary complaint
against William Rollason when he was European Home Retail
The FRC said Rollason, a chartered accountant, "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."
The watchdog also said Rollason had "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."
Rollason could not immediately be reached for comment.
An independent disciplinary tribunal will decide whether to
reject or uphold the FRC complaint. These disciplinary tribunals
have just been given powers to impose stiffer fines.
The FRC also investigated other European Home Retail and
Farepak staff but decided not to pursue a formal complaint
An attempt by the government to try to have Farepak's former
directors barred from serving on a board again had to be
abandoned in June.
Farepak operated by collecting money from customers
throughout the year in return for a hamper or vouchers that
could be spent at several retailers, helping people to spread
the cost of Christmas over many months.
($1 = 0.6242 British pounds)
(Reporting by Huw Jones. Editing by Jane Merriman)