DISHONEST ICAEW MEMBER EXCLUDED FOR LYING

DISHONEST ICAEW MEMBER

EXCLUDED FOR LYING

AA  Former high-flying _finance

director has been expelled

from ICAEW membership

after he lied about his wealth during

divorce proceedings.

Simon Kingdon, former _finance

director to the Kensington Group and

once voted one of the top 100 FDs by

institutional shareholders, failed to

disclose a valuable shareholding to the

court and to his then wife when completing

a _financial statement as part of a consent

order. As a result, his wife’s entitlement

was lower than it should have been.

When she later discovered that he’d

sold some of the shareholding for

£1.633m, she took him back to court and

won an additional £481,000. His appeal

against the order was dismissed.

In the judgement, the Court of Appeal

said that he had been guilty of deliberate,

substantial and protracted nondisclosure.

It referred to his “lies” in the

earlier proceedings, stressing that “were

there to be a second, updated, enquiry

into all the matters speci_fied in the

subsection, no assertion on his part in

relation to his _financial circumstances…

would be likely to be accepted unless

clearly established following protracted

and costly examination”.

Kingdon separated from his wife in 2003

while he was Kensington’s FD. In December

that year Kensington and a group of

individual investors set up a joint private

venture, Money Partners Holdings Ltd

(MPH), to make sub-prime mortgage loans.

Divorce proceedings started and in

August 2004 Kingdon swore an af_fidavit

that purported to give “full, frank and

clear disclosure of his _financial

circumstances”. However, it failed to

mention that in July 2004 he had

acquired 10% of MPH’s issued shares with

an undocumented loan from Barclays

Bank. The shares came with various

conditions, including a two-year option

for Kensington to buy.

In October 2004, Kingdon left

Kensington and became FD of MPH. In a

questionnaire from his wife, he denied

having any share options in MPH and

again failed to disclose his shareholding.

In March 2005, his counsel _filed a

position statement that all the shares in

MPH were held by Kensington and the

investor group and that he would “not

have access to shares or share options”.

In November 2006, Kensington

decided to exercise its option and

purchased around half of his

shareholding for £1.633m. After repaying

the Barclays loan and taking into account

tax and tax relief, he made a net gain on

the disposal of £1.268m. His ex-wife found

out about the shares in January 2008

when the sub-prime bubble burst and

MPH collapsed.

Although Kingdon admitted the

non-disclosure to the ICAEW disciplinary

committee tribunal, he argued that he

had not been dishonest. Rather, he said,

the shares and the loan to acquire them

represented neither a positive asset that

required disclosure nor a liability that he

was “subject to”. In _financial terms, the

position was effectively zero.

The ICAEW disciplinary committee

tribunal was unimpressed. “It is

implausible,” it said, “that this defendant,

in the midst of highly contentious divorce

proceedings, assisted by solicitors and

counsel and aware from the face of the

document that he is completing that he

must give full, frank and clear disclosure

of all his _financial and other circumstances,

would take it upon himself, without

taking any professional advice, to decide,

for the reasons he has given in his

evidence, not to disclose the acquisition

of 200,000 shares at a par value of

£200,000 and a personal loan from a

bank of that amount to acquire them.”

A more credible interpretation was that

Kingdon did not want his wife or the

court to know about the share acquisition

and so he deliberately did not disclose it