GB - Cushnie auditors face suit

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Tony Lomas, PricewaterhouseCoopers' chief insolvency practitioner, is preparing a lawsuit against the firm that acted as auditors to Versailles, the trade financing firm that collapsed three years ago after revealing a £100m black hole in its books.

Lawyers for PwC have filed papers with the high court in London naming eight Nunn Hayward partners - including founders Ian Nunn and Peter Hayward as well as Tom Dales, the audit partner who worked on the Versailles account.

Versailles, which provided bridging loans to companies waiting for customer payments, floated on the stock exchange in 1995 and grew within five years to be valued as a FTSE 250 firm at more than £630m. Its bankers called in PwC as receivers in December 1999. Among the major creditors are Royal Bank of Scotland and NatWest.

In 2001, the group's founder and former chairman, Carl Cushnie, and his finance director, Frederick Clough, were charged by the serious fraud office with fraudulent trading throughout much of the 1990s.

A year later Mr Dales, who will not face criminal charges, was struck off the register of chartered accountants and fined £10,000 after admitting to a professional lack of integrity in 1998 and 1999.

The accountancy profession's joint disciplinary scheme is also due to give a ruling on complaints against Nunn Hayward relating to the sending of letters of comfort to Versailles. Nunn Hayward, based in Gerrards Cross, Buckinghamshire, had always been seen as conspicuously smaller than accountancy companies working for Versailles' FTSE 250 peers.

A spokeswoman for PwC refused to be drawn on the size of the claim - which is understood has still to be served on the defendants.

Mr Lomas has also filed a claim for £50m in damages against Mr Clough and his girlfriend, Otupa Obudu, who is also known as Bibi.

Guardian

-- Anonymous, May 27, 2003


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