The Financial Reporting Council (FRC) has launched an investigation under the accountancy scheme into the conduct of two former members, Christopher Moore and Mark Woodbridge, who are both former executives of Torex Retail plc.
The move follows criminal convictions for the pair over charges of false accounting following an investigation by the Serious Fraud Office (SFO) in June 2013. Both were members of ACCA at the time.
Mark Woodbridge, the former group financial accountant of software supplier Torex Retail, was given a jail sentence of three years and 10 months, disqualified from acting as a company director for three years and ordered to pay costs of £170,000 within 12 months. Former chairman and chief executive Christopher Moore had already pleaded guilty to the charges against him before the case came to trial.
The SFO investigation found that Woodbridge, Moore and former executive chairman Robert Loosemore defrauded the shareholders of the company between May and August 2006 by falsely inflating by £6.5m the cash at bank/revenue figures of the company's interim results which were published on 14 August 2006.
In order to justify these entries the defendants created two false documents: a false distribution agreement worth £5m between the company and Loosemore's private company, Magdalen Consulting Ltd; and a false 'Goodwill Deposit' agreement worth £1.5m between the company and Loosemore.
Woodbridge was also found guilty on an additional charge of conspiring between November 2006 and 26 January 2007 to defraud shareholders by creating a further false agreement between the company and Magdalen Consulting Ltd which purported to vary the original false distribution agreement in order to sustain the original fraud. Woodbridge was also found guilty of false accounting between May and August 2006 when he caused a further sum of £2m revenue to be falsely recognised in the company's interims financial statement.
Torex, which started out in 2004, was listed on AIM and went into administration in June 2007 following the suspension of trading in shares of the company on 26 January 2007.
