The owner of Barnsley Football Club became a multi-millionaire by fiddling an IT firm’s accounts to mislead the stock market, a court heard yesterday.
Patrick Cryne, 61, is accused of conspiring with three colleagues at iSoft Group PLC to give an inaccurate account of how the company was doing for their own personal gain.
Jurors were told their was a “huge discrepancy” between the accounts that were published and what they were in reality.
Former chief executive Timothy Whiston, 44, of Lymm, Cheshire, and former directors Stephen Graham, 48, from Knutsford, Cheshire, and John Whelan, 45, of Cheadle Hulme, Stockport, appeared in the dock as they went on trial at London’s Southwark Crown Court.
However jurors were told that Cryne, who was chairman of the company at the time, will be tried separately at a later date due to illness.
Beginning his opening of the case, prosecutor Richard Latham QC said that Cryne and Graham became multi-millionaires from the alleged crime, while the other two defendants also became rich.
All of them received substantial annual bonuses on top of their salaries.
He told jurors that as a public limited company the firm, which specialises in providing software for health service providers, had to publish details of its accounts twice yearly.
He said: “If a company mis-states its accounts it has very serious consequences for us all.
“This is not about a slight slip-up. It’s not about a marginal error of no real consequence. It’s precisely the opposite. This case involves a continuing deliberate deception.”
He said the defendants misled the company’s non-executive directors, its audit committee and its external auditors, and may have corrupted other more junior members of staff.
Whiston, Graham and Whelan all deny a single charge of conspiring together to make statements, promises or false acts about iSoft Group plc which they knew to be false, misleading or deceptive.
The offences are alleged to have been carried out between October 2003 and July 2006.
Mr Latham gave jurors an account of how iSoft was set up.
Cryne, Graham and a third, now deceased, man named Roger Dickens bought out an existing company in 1999 and all three became directors.
Whiston and Whelan, both chartered accountants, joined at later dates and all went on to hold various roles at different times.
“These four men held between them the most important roles in the company,” he said.
The court heard that in November 2002 a meeting was held in which they discussed the company’s five-year vision, in which they talked of it growing to having a £215m-a-year turnover and becoming the world’s largest healthcare application provider outside the United States.
Mr Latham said that between 2001 and 2005 the number of people employed by the company rose from 250 to 2,500 and its pre-tax profits increased nearly 10-fold. It became one of the FTSE 250 companies and by 2004 it had a market capitalisation of approximately £900m.
“During the relevant period hundreds of thousands of shares were traded on the market almost every working day,” he said.
“A substantial part of the defendants’ remuneration and the remuneration of Patrick Cryne was linked to the company’s reported financial performance.”
The court heard the defendants took home substantial six-figure sums each year while top earner Cryne was paid £900,000 in 2004, including his bonus.
But Mr Latham added that in order to sustain its success and grow further the firm needed to secure larger and larger contracts.
Jurors heard that in February 2003, South Eastern Health Board in Ireland approached iSoft about a new contract and a day later the company announced this to the market, although it was only then at a stage of negotiation.
The trial should resume today.