Rok this morning asked for the London Stock Exchange to suspend its shares as it prepared to enter administration, barely three months after it suspended its finance director and later exonerated him of causing a failure in its financial controls that now appear to have led to the company’s demise.
Rok endured a writedown after uncovering this summer a failure of financial controls in its plumbing, heating and electrical division. Finance director Ashley Martin was then suspended while the company undertook an investigation to establish what had gone wrong and said it would draft in former Amey FD David Miller as interim FD.
That appointment never materialised as Rok confirmed to Financial Director just weeks later that it had changed its mind and would not be hiring Miller, adding that it would not be making a public statement to that effect. Sources close to the company said that it had suffered a behind-closed-doors investor and analyst revolt when news of Miller’s appointment broke, due to their perception of him as having left his last publicly-quoted role in controversy.
David Miller was FD of construction business Amey between 1998 and 2002 and led its adoption of the Financial Reporting Council’s Urgent Issues Task Force ‘abstract 34′ accounting standard for pre-bid costs on private finance initiative contracts.
The change forced the business to restate its numbers for the two previous years and unveil a full-year loss of £18m – when it had been expected to post £53m in profit. Analysts also panned the way Amey communicated the accounting change. Miller resigned six months later and then gave an interview to the Telegraph in which he called international accounting standards “a little cup of sick”.
Rok said that it found no evidence of wrongdoing on Martin’s part and exonerated him fully. Martin nevertheless resigned and the role was subsumed by his finance team on an interim basis.