Merchant bank J Henry Schroder Wagg has launched a lawsuit against accountants Deloitte Haskins & Sells alleging irregularities in parts of the listing particulars for PPL (Holdings) Plc, the defunct former Package Programs Ltd, which called in a receiver in January only 11 months after going public to an enthusiastic welcome. According to the Financial […]
Merchant bank J Henry Schroder Wagg has launched a lawsuit against accountants Deloitte Haskins & Sells alleging irregularities in parts of the listing particulars for PPL (Holdings) Plc, the defunct former Package Programs Ltd, which called in a receiver in January only 11 months after going public to an enthusiastic welcome. According to the Financial Times, the suit alleges negligent misstatement by Deloittes, and breach of warranty by former PPL chairman Roy Taylor and his Picton Taylor Securities company which was a major shareholder in PPL. The suit inter alia alleges that sales were improperly included in PPL’s profit and loss account for the year to September 30 1985. The suit is being brought on behalf of two major shareholders, Legal & General and Provident Mutual, but is similar to a US class action in that the aim is that any settlement should benefit all shareholders with a valid claim for damages. Deloittes issued a statement saying We do not accept that sales were incorrectly taken in the September 1985 accounts, nor do we believe that the contents of either those accounts or the prospectus had any impact on the failure of the company. That arose from lack of sales and excessive expenditure in 1986. The contentious areas such as accounting for income and cash flow were fully discussed by the directors with Schroders and ourselves at the time of the flotation, Schroders acting as merchant bank in the flotation. We believe that nothing was hidden from Schroders at the time, and therefore we are surprised that Schroders are proceeding with this action. It will indeed take some years to resolve. PPL’s principal business was marketing US software packages in the UK. When the company crashed, there were very few assets, and holders, who had seen the shares suspended in November at 81 pence after being placed at 145p, were left with nothing.
