Disciplinary body drops Wakeham case
4 Aug 08
The accountancy profession's Joint Disciplinary Scheme (JDS) has opted not to take action against Lord Wakeham for his role as a non-executive director and member of the audit committee at Enron when it collapsed
But the JDS said that there was a need to clarify the role of non-executives and has said it will write to ICAS and the Institute of Chartered Accountants of England and Wales asking for guidance to be sent to members.
Chris Dickson, executive counsel of the JDS, said he would take no action against Lord Wakeham, a former Tory chief whip in Lady Thatcher’s government and a member of ICAEW, after concluding that further investigations would not be “practicable”.
“To investigate the matter further against Lord Wakeham would entail finding, almost certainly in the US, evidence which has not been discovered by the authorities there. The executive counsel considers that it is not practicable to undertake such a search, and is conscious that he has no power to compel any witness in the US
to co-operate with him. He does not believe, therefore, that it is in the public interest
for him to enquire further into the matter,” the statement said.
After the collapse of Enron in 2001, its directors have been extensively investigated in the US resulting in CFO Andrew Fastow, being sentenced to six years imprisonment and a $24m (£11.9m) fine. The auditors, Andersen, were fined $500,000 and given a five-year probation sentence, though the conviction was quashed.
But the US authorities did not see fit to take action against non-executive directors such as Lord Wakeham.
The JDS began inquiries into Lord Wakeham on the basis of the key role he played as he was the only professional accountant on Enron’s audit committee. “It does not appear that Lord Wakeham had a sufficient understanding of these transactions,” the JDS said..