Cattles directors herded out

Cattles plc has announced a clear-out of its Board following the completion of a forensic review into its impairment provisions:

  • Norman Broadhurst (Chairman), who previously announced he intended to retire at the AGM, has stood down from the board with immediate effect.
  • David Postings (Chief Executive) is leaving the company with immediate effect, although will remain available to the company on a consultancy basis for the next six weeks.
  • James Corr (Finance Director), Ian Cummine (Chief Operating Officer of Cattles plc and Chairman of Welcome) and four senior executives (the latter not being  board members) have had their employment terminated by the Company. All were previously suspended from their duties in March 2009. None will receive any compensation for loss of office.
  • Mark Collins (Treasury & Risk Director) is leaving the company with immediate effect.

In addition, a number of other employees, at both Group and subsidiary level, ‘will face appropriate disciplinary action’.

Margaret Young, currently a non-executive director and Chairman of the Audit Committee, has been appointed Executive Chairman and will be supported by Robert East who will join the Board as Chief Restructuring Officer following the AGM on 29 July.

Background

On 20 February 2009, the Board of Cattles announced that it would delay the release of its preliminary results announcement for the year ended 31 December 2008 pending completion of a review of the adequacy of the Group’s impairment provisions. Later that month Cattles appointed Deloitte, its internal auditor, alongside its legal adviser Freshfields Bruckhaus Deringer LLP to assist management in the review of its impairment provisions.

In a RIS announcement on 3 March 2009, the Company admitted that there had been a breakdown in internal controls which has resulted in the Group’s impairment policies having been applied incorrectly. On 10 March, the Company announced the suspension of James Corr, Finance Director of Cattles, Ian Cummine, Chief Operating Officer of Cattles and Chairman of Welcome Financial Services, and Adrian Cummings, Compliance and Risk Director for Welcome Financial Services Lending Division pending the outcome of the review. On 1 April 2009, Cattles announced that it would need to increase its impairment provisions by £700m, which would result in the Company posting a significant loss for 2008 and a requirement to restate its accounts for 2007.

The Company’s shares were suspended from trading from 23 April 2009 as it was not in a position to publish its report and accounts by 30 April 2009, as required by the Disclosure and Transparency Rule (DTR) 4.1.3.

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