Group FD James Corr and FD of its principal operating entity, Peter Miller, are among the six suspended from Cattles after the lender discovered “a breakdown in internal controls” on the use of impairment provisions that mean the group will restate its 2007 accounts.
Corr is suspended from duties pending the outcome of an internal forensic
review established by its audit committee, assisted by the group’s internal
auditors, Deloitte, and its legal adviser Freshfields Bruckhaus Deringer.
Miller, FD for its mortgage and loans business Welcome Financial Services (WFS),
has also been suspended.
A week before announcing Corr’s suspension the group said he was to delay his
retirement and stay on the board to see through the internal review, but that he
would hand daily duties to the group’s banking director, Robert East. East’s
appointment to the board is postponed while the group clarifies its position.
In addition to Miller’s suspension, four other WFS executives have been
suspended – compliance and risk director for lending, Adrian Cummings, managing
director John Blake, operations director Mick Belcher and chairman Ian Cummine.
Acting group FD East has been with Cattles since last summer having joined
from Barclays to help the group apply for a banking license and form a retail
bank. That application was dropped, because of questions over the terms of its
£63m bank facilities that were under renegotiation.
The group says it will report a significant pre-tax loss for 2008 and that it
will restate its finances for 2007.
The internal inquiry found Cattles in breach of its borrowing covenants and it
is now seeking waivers from its debt providers, with problems centred around
WPS.
Cattles dropped from the FTSE-250 into the Smallcaps index in the quarterly
review last month.
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