DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr John Gimson Heard on: March 2016 Location: Committee: Legal Adviser: Persons present and capacity: Observers: Charles Darwin House, 12 Roger Street, London WC1N 2JU and The Chartered Institute of Arbitrators, 12 Bloomsbury Square, London, WC1A 2LP Mr John Wilson (Chairman - Accountant), Mr Alastair Papps (Lay) and Mr Gerard McClay (Lay) Mr Richard Ferry-Swainson Mr Paul Ozin QC (ACCA Case Presenter), Ms Jill Baldwin (Hearings Officer), Mr John Gimson (Member), Mr Kenneth Hamer (Member s Representative) Mr Christopher Cope (Member s Representative) Mr David Young (Member s Representative) None INTRODUCTION 1. The Disciplinary Committee (the Committee) convened to consider two Allegations against Mr Gimson. 2. The papers before the Committee were numbered 1 to 776. There were, however, some omissions in the bundle of material provided by the Defence. This material was provided at the hearing and numbered D1 to D158. For the avoidance of doubt, some of those pages also appeared in the bundle numbered 1 to 776. ALLEGATIONS/BRIEF BACKGROUND 3. The Allegations were as follows:

2 Allegation 1 Pursuant to bye-law 8(a)(i) Mr Gimson is guilty of misconduct, in 2009, knowing that Mr A was subject to a disqualification order under the terms of the Company Director Disqualification Act 1986, (i) He knowingly assisted Mr A to be concerned in the management of companies; (ii) He did so, knowing that Mr A was thereby acting in contravention of the disqualification order. The companies referred to in Allegation 1 are (jointly and severally): (a) Company 1; (b) Company 2; (c) Company 3; (d) Company 4; (e) Company 5; (f) Company 7. Allegation 2 Pursuant to bye-law 8(a)(i) Mr Gimson is guilty of misconduct in that he made or permitted payments to be made from companies of which Mrs B was a director, Company 1 and Company 2, (a) to Mrs C and (b) to or for the benefit of companies controlled by himself and/or Mr A namely, Company 3, Company 4, Company 5 and Firm 6, (i) without Mrs B s knowledge or agreement; (ii) dishonestly. 4. Mr Gimson was admitted as a member of ACCA on 17 April 2000 and as a Fellow on 17 April This case concerned Mr Gimson s involvement with a man called Mr A. On 2 November 1995 Mr A was sentenced to a total of four years imprisonment for two offences of fraud and two offences under section 11 of the Company Directors Disqualification Act He was disqualified from acting as a director under section 2 of the Act for 10 years. On 22 October 2003 a

3 maximum period of disqualification of 15 years was imposed on Mr A as a result of his operations with relation to a failed company. He thus remains disqualified until Section 11 of the Act states that it is an offence for a person who is an undischarged bankrupt to act as a director of, or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company. A person acting in contravention of section 11 is liable to imprisonment for up to two years. 6. ACCA alleged that Mr Gimson knowingly assisted Mr A to be concerned in the management of the companies listed above, and that he did so in the knowledge that Mr A was thereby acting in contravention of the disqualification order. 7. Being concerned in the management of a company may include such activities as: undertaking tasks in relation to the company s business, for example ordering, paying or negotiating with suppliers or customers, renting or buying premises, hiring or firing employees, dealing with the company bank account; acting as a management consultant; acting in a governing role within the company; taking executive decisions as to the company s affairs or making it seem that one is in a position to take such decisions. 8. Additional guidance as to what is meant by being concerned in the management of companies can be found in the case of R v Archibald James Campbell (1984) 78 Cr. App. R if one looks at section 188 the wording is so widely cast that it is the opinion of this court that it is intended to insulate persons, against whom an order of disqualification has been made, from taking part in the management of company affairs generally. It is cast in the widest of terms in any way whether directly or indirectly, be concerned or take part in the management. It would be difficult to imagine a more comprehensive phraseology. It is designed to make it impossible for persons to be part of the management and central direction of company affairs.

4 9. Mr Gimson stated in an undated letter to ACCA that: By the time that I first met [Mr A], I was aware of some of his background, namely that he had served time in prison. I also discovered that he had twice been adjudicated bankrupt and disqualified as a director of limited companies for a period of 15 years although I worked with [Mr A], I did not work for him 10. Mr Gimson stated in a further letter to ACCA dated 27 May 2011 that: From time to time, [Mr A] would give advice and make suggestions with regard to the running of the various companies, in which I was involved. However, I never allowed him to act for any of these businesses or give a direct instruction. When he came close to this, I made it clear that I would not accept [Mr A s] involvement. 11. However, in a statement provided to ACCA by Mr Gimson, dated 29 January 2016, he stated, I admit that complaint, but only for the purpose of these proceedings. Although I was aware of the previous conviction and disqualification of [Mr A], I believed that with a proper separation of duties, any conflict could be avoided. As matters progressed, I found it increasingly difficult to achieve this, and after 6 months or so, I resolved to terminate the relationship. I accept that I should have acted more speedily, but I had also developed a relationship with [Mr D and Mrs B], whom I wished to support and which I could only achieve by remaining a director. 12. Mr Ozin directed the Committee to a judgment in the High Court before His Honourable Mr Justice Evans-Lombe who gave a summation of the alleged behaviour of Mr A as follows, The burden of the allegations contained in the petitions is that the Companies were used by a [Mr A] as vehicles for fraud, namely the extraction of assets from companies in financial distress before they entered formal insolvent administration. Thus it is alleged that, having discovered an appropriate target company, [Mr A] would procure the acquisition of a controlling interest in its shares by one of the Companies. Having obtained control, the trading of the target company would be continued for a brief period during which assets would be abstracted,

5 typically as substantial management fees after which the target company would be left to be wound up by its creditors. 13. It was ACCA s case that it was just such behaviour that Mr A was engaged in with respect to the two complainants in this case and that he used a team which included Mr Gimson. As an ACCA member Mr Gimson provided a veneer of respectability to Mr A s team designed to allay any concerns clients might have had on learning that Mr A was a convicted fraudster and disqualified director. Mr Ozin said that the contravention of a disqualification order was a serious matter which could result in a term of imprisonment and that on the face of it, by admitting charge 1, for the purpose of these proceedings, what Mr Gimson had admitted was, factually speaking, assisting Mr A to commit a criminal offence, which was very serious. 14. In his second statement to the Committee dated 24 February 2016, Mr Gimson appeared to accept that Mr A was behaving in the way as described by Mr Justice Evans-Lombe, by stating, It is now my belief that the entire process was a means whereby [Mr A] would extract money from [Mr D and Mrs B] and [Mr E and Mrs F] at a greatly inflated fee in respect of the fairly modest services that he was going to provide. Furthermore, there was never any question of an investment, seeing that the Fermatt Trust did not exist and that [Mrs C] herself had no money to invest in her own right. 15. In that same statement Mr Gimson, when referring to various s, added, On reading those s today, they appear to me to be clear evidence of [Mr A] becoming involved in the management of these companies. He should not have done so and I accept that, as I was in receipt of these s, I should have attempted to stop [Mr A] from becoming involved in management as his s suggested. Indeed, had he persisted, I should have resigned my position. By doing nothing, I accept that I knowingly assisted him to be concerned in the management of these companies. By doing so, [Mr A] was acting in contravention of the disqualification order. 16. Mr Ozin said that on 2 April 2009 Mr Gimson, in his role assisting Mr A, set up a company called Company 5, which he said was set up so that he could assist Mr A with reference to the Fermatt Trust, of which Mrs C was said to

6 be the main beneficiary. Mr Gimson was the sole director and shareholder of Company 5. Mr Gimson now accepted that the Fermatt Trust was a fiction and a vehicle for fraud. 17. There were two complainants in this case, Mr D and Mrs F. Mrs F s complaint 18. The second complainant was in fact first chronologically. Mrs F s husband s company, Company 8, experienced financial difficulties due to customers defaulting on payments in Mr A made an offer to purchase Company 8 which was refused by Mr E in Mr A subsequently offered his services and that of his team to assist Company 8 whilst its cashflow was very tight in Mr A informed Mr E and Mrs F that Mr Gimson, an ACCA member, was one of the members of his team. Subsequent correspondence between them confirmed those arrangements and that the service was provided by a team headed by Mr A, of which Mr Gimson was an integral member. 19. Mr E and Mrs F decided to engage the services of Mr A and his team in April The allegation in this case related to Mr Gimson s conduct during the period, April 2009 to February 2010, after which Mrs F s dealings with Mr Gimson ceased. 20. In an from Mr A to Mr E dated 14 April 2009, Mr A stated the following: John Gimson (ACCA) will be the main provider of Management John is a direct employee of ours as Financial Director John Gimson has now formed a UK Limited Company called [Company 4] (SPV) for us, with John Gimson being the sole Director and secretary of that company. JG will open a Bank Account for the SPV. JG will also set up the accounting policies with you to operate such

7 JG will open negotiations with all necessary suppliers and try and arrange supply and new credit for [Company 8] under the new SPV ownership There is no additional fee or direct instruction to JG for his services to [Company 8] or the SPV in that there is no engagement by you of his services. 21. Mr Ozin acknowledged that Mr Gimson was not copied into this , but said it was entirely consistent with the picture that emerged from other s within the bundle and that it was inconceivable that Mr Gimson was not aware that he was being presented by Mr A in this way. This was because this was the approach adopted by Mr A with Mr Gimson being sent in as the management man to the companies concerned. Mr Ozin said that Mr A would not have made these assertions if he thought that Mr Gimson would baulk at them or contradict them. The modus operandi was Mr A calling the shots and running the show, said Mr Ozin, and sending Mr Gimson in as his man at the scene telling them what to do in return for a demand of substantial payments by way of management fees. 22. Mr Ozin said there were many s between the various parties in 2009 that made it plain that Mr A was directing Mr Gimson s activities in relation to the management of the company. For example: 14 April 2009, an from Mr A to Mrs F stating that: I confirm that I have now formally instructed both John Gimson and [Mr I] [solicitor] earlier today as per our service outline 8 July 2009, an from Mr A to Mr Gimson and Mr E instructing Mr Gimson on the format in which a payment must take place. 22 July 2009, an from Mr A to Mrs F stating that: I have been copied on the reply to you from John and note the contents of your to him.

8 The original from Mrs F to Mr Gimson had not been copied to Mr A as Mrs F wanted to discuss some matters in relation to Mr A with Mr Gimson. However, Mr Gimson replied and copied Mr A in to the thereby making him aware of Mrs F s concerns and involving him in the situation. 24 July 2009, an from Mr A to Mr E and Mrs F stating that: John has informed me that you have been on the phone to him this morning 24 July 2009, an from Mr A to Mrs F stating that: all parties (including you and [Mr E] ) were, prior to our Agreement, well aware I am barred as a Company Director in the UK. It is a matter of public record in any event 27 July 2009, an from Mr A to Mrs F and copied to Mr Gimson stating that: I write to advise to put you on Notice that I am about to instruct Court proceedings against you for the recovery of sums due under the agreement between us made on 14 th April September 2009, an from Mr A to Mrs F and copied to Mr Gimson stating that: [Company 8] was compulsory Wound Up by the Court this morning (30 th September) I will in due course take the appropriate steps to wind up [Company 4] I will now commence formal Bankruptcy proceedings against you personally this week resulting in further costs. 23. Mrs F also provided, in support of the allegation, statements from two of Company 8 s employees, Mr K and Ms L. Mr K, the bookkeeper, stated that:

9 on numerous occasions I observed [Mr A] giving instruction to Mr John Gimson with regard to the above and it was my clear impression that [Mr A] was in the senior position Ms L, the office administrator, stated that: I witnessed the above gentlemen [Mr A and Mr Gimson] working together on numerous occasions and John Gimson taking direction from [Mr A] on all manner of matters to do with the accounts of the company. I thought [Mr A] was John s boss and John acted on instruction from [Mr A] when I think back to the times when I witnessed these two gentlemen working together in our offices there was no question in my mind that they were working together Mr D s complaint 24. Mr Ozin told the Committee how in March 2009, Mr D s company, Company 9, went into administration. Mr D then received a recommendation from Mr E of Company 8, with whom he had an existing business relationship, to speak to Mr A. Mr A informed Mr D that he could assist him in purchasing Company 9 back from the administrators for a good price. 25. Mr D stated that Mr A informed him that there was some disturbing material about him (Mr A) on the internet which was untrue. According to Mr D s statement Mr A told him that he had taken on the Secretary of State and had won his case and made a precedent/case law. Mr D also stated that Mr A informed Mr D and Mrs B that he employed an ACCA accountant, Mr John Gimson, who would assist the business relationship between Mr A and Mr D and Mrs B. Mr D said that he felt very reassured by the fact that Mr Gimson was an ACCA accredited accountant and had confidence in his professional qualification and therefore relied on him for expert business advice. In his oral evidence Mr D made it clear that the fact that Mr Gimson was an ACCA member impacted significantly on their decision to engage Mr A and his team. 26. Mr A explained to Mr D that Mr Gimson would be the main provider of management as he (Mr A) could not be actively involved in the day to day

10 running of the company due to his conviction and disqualification as a company director. Mr Ozin said that it was a feature of this case that Mr A adopted this position with the complainants and that it was a charade and must have been known to be so by both Mr A and Mr Gimson, because the prohibition extended much further and included being involved indirectly with the management of the companies. 27. The allegations in this case related to Mr Gimson s conduct during the period, from the end of March 2009 to January 2010, after which Mr D s dealings with Mr Gimson ceased. ACCA relied on the following s, provided by Mr D, that outlined the business relationship between him, Mr A and Mr Gimson. 29 March 2009, an from Mr A to Mr D and Mrs B: John Gimson (ACCA) will be the main provider of management John is a direct employee of ours Mr A then outlined a long list of activities for which Mr Gimson would be responsible for as follows: Forming a Limited Company (SPV) for you with John Gimson (JG) being the Director of that company JG will conduct those negotiations with the Administrator of [Company 9] JG will open a Bank account for the SPV and register the company for PAYE, VAT etc. JG will also set up the accounting policies with you to operate. JG will open negotiations with all necessary suppliers (circa 12 15) and try to arrange and supply credit for the SPV JG will also try and arrange Invoice Financing with Lloyds Commercial for the SPV as well as (with that finance) attempt to

11 purchase the Book Debt of [Company 9] from the Administrator thereby allowing the SPV to collect the remaining debt out the SPV will be funded by you as required for the normal course of running the business of the SPV by the 3 of you. You will liaise directly with JG about that 30 March 2009, an from Mr A to Mr I. The was copied to Mr Gimson: our Finance Director, John Gimson 1 April 2009, an from Mr A to Mrs B and copied to Mr D and Mr Gimson outlining the work that Mr Gimson would carry out on Mr A s instructions: JG will be with you Monday morning (6 th ) to go through accounting, VAT, PAYE, supplier queries and general matters relating to management and the businesses going forward... 9 July 2009, an from Mr Gimson to Mrs D and Mr J (Firm 10) and copied to Mr A and Mr I (Firm 10), demonstrating that Mr Gimson and Mr A were working together: For the sake of completeness, I would be grateful if you would ensure that you copy me and [Mr A] in with all correspondence that relates to these companies. I believe that there is a standing instruction with your firm to that effect. 22 July 2009, an from Mr A to Mr Gimson and Mr D. Mr A was informing Mr Gimson of his future intentions in relation to Mrs F and Company 8: I would confirm what was proposed yesterday and where we are heading I will obviously sue [Mrs F] for the monies owing as it is admitted in writing in any event NO further contact please from [Mr M/Mr D] etc with [Mr E] now please. Let him stew as they say. NO

12 new/revised invoices should be accepted from [Company 8] to [Company 2] of course 1 September 2009, an from Mr A to Mr Gimson copied to Mr D and Mrs B, demonstrating Mr A instructing Mr Gimson on transfers, invoicing and share allotments: John, 29,000 off was transferred IN to [Company 1] from [Company 7] Nat West and 28,000 exactly should be CHAPS payment this afternoon to [Company 7] Nat West Account. [Company 7] will invoice [Company 1] the full 28,000 for the stock you saw in the warehouse today. Please also CHAPS today the 717(?) to [Firm 11] We need to do the full share allotments for [Company 1] later in the week 3 September 2009, an from Mr A to Mr Gimson and Mr D instructing the complainant and Mr Gimson on the format in which payments were to be requested: This is the format needed to request John to do payments!! John will then confirm or advise why not!! 3 September 2009, an from Mr A to Mr Gimson instructing Mr Gimson on the monthly management charges: You will see that I have agreed that [Company 5] does a management charge of 3,000 a month on both [Company 2] and [Company 1]. In addition, I want you to All I would ask is that you make sure of when dealing with [Company 2] and [Company 1] payments to [Company 5] is that when you issue (say) 3,000 to [Company 5] you also issue 2,000 to [Company 7] (pro rata 60/40) at the same time!! September 2009, an from Mr Gimson to Mr A, copied to Mr D and Mrs B, informing Mr A on the current status of payments to Inland Revenue and requesting his approval on the format of information provided:

13 I can confirm that I have made NO payments on behalf of [Company 2] to the Inland Revenue If you would prefer me not to provide information in this way, please just let me know. 5 October 2009, an from Mr A to Mr Gimson and Mr D and Mrs B setting out the accounting procedures to be followed. Having had discussions now with all 3 of you now I am just setting out in writing some strict accounting procedures for [Company 1] and [Company 2] 9 October 2009, an from Mr A to Mr Gimson and Mr D and Mrs B instructing Mr Gimson on how payments were to be allocated: I am at Bordon. ANY payments over the next week or so are going to be rounded on account payments which we will then allocate on the [Company 2/Company 1/Company 7] ledgers and advise you of which invoices are allocated specifically. There is apparently 25k into [Company 2] and 16k into [Company 1] later today/monday morning!! Whilst that money is clearing we will all decide what exact payments are going to be instructed late next week. 23 December 2009, an from Mr A to Mr Gimson, copied to Mr D and Mrs B, setting out a list of tasks that Mr A required Mr Gimson to perform: Please also provide the up to date position of each and every (including [Company 4]) that I can forward including, shareholding actually registered, Director(s) appointed, Insurance held, VAT number, Tax Number, Employees details, Contracts signed that are commitments for the company concerned (employment and otherwise to include my fee Agreements), Bank Account(s) numbers and details and Mandates.

14 I also still need to send them [accountants for the Trust] the full detailed ledger accounting position of each company 28. The complainant also provided, in support of the allegation above, a statement prepared by his company book keeper, Mrs H, who was employed from 2 November Mrs H stated that Mr Gimson asked her to remove an from the wall listing office procedures sent by Mr A during the course of a visit from the Companies House Investigation Team. Mrs H stated that the reason that Mr Gimson gave for removing it was because Mr A was not allowed to be involved in the management of a company. 29. Mr Ozin said that from the evidence provided by the complainant it was evident that Mr Gimson was aware of Mr A s past history, as shown by the following s: 25 March 2009, an from Mr Gimson to Mr A which set out a structure for their business relationship going forward: I propose that I incorporate a limited company whose function is to act as the management tool for the companies that the trustees purchase distances the beneficiaries from any executive decisions, removing threat of creation of shadow directorships 25 March 2009, an from Mr A to Mr Gimson: makes sense for you and the shareholders. Obviously, I don t ever want anyone to even suggest shadow directorships as genuinely I have no interest in the Management of these acquisitions 5 January 2010, an from Mr A to Mr Gimson and Mr D and Mrs B: I want to make it clear that you have all been aware form [sic] meeting that I am a barred Director of UK companies and that I have not had any part in the management of any business I know you

15 all know this but I felt it prudent to just make sure it is in writing yet again. 30. Mr Ozin reminded the Committee, that as noted above, a disqualification order prevents an individual, not only from being a director of a company, but also from taking part, directly or indirectly, in the promotion, formation or management of a company The management of a company is broadly defined, and deliberately so, and included undertaking tasks in relation to the company s business. Mr Ozin submitted that Mr A was indirectly involved in the management of companies, and used Mr Gimson to effect his instructions. 31. In respect of the complaint of Mr D, examples of this were as follows: tasks relating to the formation of a new company, arranging bank accounts and financing and negotiation with suppliers; directing payments; unilaterally agreeing management charges; setting out accounting procedures; and requesting management information. 32. In respect of the complaint of Mrs F, examples of this were as follows: tasks relating to the formation of a new company, arranging bank accounts and financing and negotiations with suppliers; directing payments. 33. Mr Ozin submitted that there was overwhelming evidence that Mr Gimson followed Mr A s instructions in respect of the work he completed on the complainants companies. He said Mr Gimson never appeared to question any instruction that Mr A gave him. He further submitted that if it had not been for Mr Gimson, Mr A would not have been able to exercise control and influence over the complainants companies in the manner in which he did, in spite of Mr A being restricted from the management of companies by the director s disqualification order. It was ACCA s case that the conduct in which Mr Gimson had engaged by assisting Mr A had brought discredit to

16 himself, ACCA and to the accountancy profession and he was therefore guilty of misconduct. 34. At the outset of the hearing, and as indicated in advance of the hearing, Mr Gimson admitted the entirety of the facts of Allegation 1. He also accepted that his admitted behaviour amounted to misconduct, whilst acknowledging that it remained a matter for the Committee to determine whether it did in fact amount to misconduct. Allegation ACCA s case was that Mr Gimson had permitted payments to be made from companies of which Mrs B was a director, namely Company 1 and Company 2 to various entities without Mrs B s knowledge or agreement and that such conduct was dishonest. 36. Mr D gave evidence that Mr Gimson was running the Lloyds bank accounts for Company 1 and Company 2 and that his wife continually asked for bank statements, but that Mr Gimson would send excel spreadsheets that he had completed rather than the actual bank statements. Mr D went on to say that the Lloyds bank statements were eventually received in January 2010 and these showed money being transferred to Company 5 and Firm 6. He said that no invoices had been received for these payments. 37. A review of the Company 1 bank statements highlighted the following payments being made: 28 May 2009 Company 5 4, June 2009 Company 5 1, July 2009 Mrs C 2, October 2009 Company 5 3, A review of the Company 2 bank statements highlighted the following payments being made:

17 12 June 2009 Company 5 10,000 and 7, July 2009 Mrs C 5, October 2009 Company 5 3, December 2009 Company 5 1, In addition, between 30 October 2009 and 17 December payments of 25, totalling 200, were made to Firm Mr D said that he was not a director of either business, that was his wife Mrs B. He was the sales person and his wife was essentially the bookkeeper. He accepted that there was correspondence about some of the payments and also that there were invoices for the management services provided by Company 5 and the payroll services provided by Firm 6. He agreed that both Company 5 and Firm 6 had been engaged to carry out their respective roles and that they were due to be paid, however his understanding was that they would not be paid, or at least the management fees would not be paid, until suppliers, PAYE, HMRC and employees had been paid and they were in profit. 41. Mrs B did not provide a statement nor did she attend to give evidence. The only evidence ostensibly from her was in the form of an unsigned, undated Director s Questionnaire in respect of Company 2 and Company 13 (formally Company 1). Mr D said this was completed by his wife when Company 2 went into liquidation. In that questionnaire Mrs B said, my Husband and I realised around about October/November 09, that John Gimson we presume on the instructions of [Mr A] had taken management fees and other payments without permission or any valid invoices or explanation. She added, When we saw that the bank accounts were starting to be used for their own use, we insisted that we took over the company accounts.

18 Mr Gimson s response 42. Mr Gimson stated in a letter to ACCA dated 27 May 2011 that: I either obtained consent from [Mr D and Mrs B] or they were fully aware of the situation Submission of no case to answer 43. At the conclusion of ACCA s case, Mr Hamer made a submission that there was no case to answer on Allegation 2. The application was opposed by Mr Ozin. 44. Mr Hamer submitted, inter alia, that there was no witness statement or oral evidence from Mrs B, the Director of the two companies, and the person named in the allegation. He said there was, therefore, no evidence about her state of knowledge and furthermore that all the material and the questions that he had put to Mr D, demonstrated that both Mr D and Mrs B did in fact have knowledge of the payments. He submitted that if they had knowledge then it can hardly have been dishonest for Mr Gimson to do that which he had been engaged to do. He invited the Committee to give no weight to the hearsay Director s Questionnaire ostensibly completed by Mrs B. 45. Mr Ozin submitted that there was sufficient evidence to prove Allegation 2. He pointed to the evidence of Mr D as supported by the Director s Questionnaire completed by Mrs B and encouraged the Committee to look at the background and context and to view the behaviour in light of the overall way in which Mr A and Mr Gimson operated. 46. The Committee considered with care the submissions made by the parties together with the oral and written evidence. It accepted the advice of the Legal Adviser. 47. The Committee noted that at no time during his evidence did Mr D state specifically that he knew about his wife s state of knowledge. He accepted, when cross-examined, that his wife s companies had engaged Mr Gimson

19 and his management company and that they had given Mr Gimson control of the bank accounts. He also accepted that Company 5 was due to be paid a management fee, albeit with the caveat that other bills should be settled first. He also accepted that his wife dealt with the financial side of the business whilst he concentrated on sales. The Committee noted that there were in fact invoices to support the payments made to both Company 5 and Firm 6 and also that there were two s dealing with the payments to Mrs C which, prima facie, appeared to indicate that Mr D and Mrs B and been informed about them. Mr D gave evidence that he could not remember whether he had had that conversation or not. The Committee gave little weight to the hearsay Director s Questionnaire, which had not been drafted with these proceedings in mind, particularly in light of the absence of any witness statement from Mrs B and any direct evidence as to her state of mind. 48. The whole of Allegation 2 was predicated on the knowledge of Mrs B of the payments going out. She was the director and it was she who was named in the Allegation, not Mr D. The Committee had not heard from Mrs B and so had no evidence about her state of mind. Indeed the documentary material supported the assertion that at the very least Mrs B, and possibly Mr D, must have had some knowledge about the payments. Accordingly, the Committee concluded that there was not sufficient evidence that the payments were made without Mrs B s knowledge. 49. Without the proof that Mrs B was unaware of these payments the Committee could not see how they could be satisfied on the balance of probabilities that the payments were dishonest. As stated above, Mr Gimson was engaged to carry out management tasks which included being in charge of the bank accounts. Thereafter, Mr Gimson made or permitted payments to be made to Company 5 by way of management fees, Mr D accepted that management fees were payable but he believed they should not have been paid until the conditions referred to in paragraph 40 above had been met. The Committee noted that the Allegation did not refer to the appropriateness or otherwise of the payments, but rather to whether Mrs B was aware of them and whether they were dishonest.

20 50. The Committee therefore accepted the defence application and found that there was insufficient evidence to allow Allegation 2 to proceed and formally found it not proved in its entirety. DECISION ON FACTS/ALLEGATION AND REASONS 51. The Committee considered with care the oral evidence of Mr D and took into account all the documentary evidence relied on by the parties, together with the submissions made by Mr Ozin and those made by Mr Hamer. The Committee accepted the advice of the Legal Adviser. At this stage the only matter that fell to be decided was whether the facts admitted to in Allegation 1 amounted to misconduct. 52. Mr Gimson admitted the facts of Allegation 1 and the Committee therefore found those facts proved by way of admission. The Committee then had to consider whether those facts amounted to misconduct. Mr Hamer on behalf of Mr Gimson accepted that the admitted facts in Allegation 1 amounted to misconduct and the Committee took this acceptance into account when making its own determination. 53. Mr Gimson s association with Mr A enabled Mr A to continue to extract assets, including cash, from companies in financial distress and to do so, allegedly, using a Trust set up as a vehicle for fraud, a fact accepted by Mr Gimson. The Department for Trade and Industry had put restrictions on Mr A including a fifteen year director disqualification. However, Mr A was able to circumvent those restrictions due to the assistance provided by Mr Gimson. On the face of the papers it appeared that by acting in the management of these companies, Mr A was in breach of the order disqualifying him from being a director and in so doing he was committing a serious criminal offence. Thus, by assisting him, whilst in the knowledge that by doing so Mr A was thereby acting in contravention of his disqualification order, Mr Gimson was assisting him to break the law. 54. The Committee was in no doubt that this conduct was most serious and extremely discreditable to Mr Gimson, the accountancy profession and ultimately to ACCA, as Mr A continually informed potential companies that Mr Gimson was an ACCA member, thereby, allaying any fears that they had

21 about his history. This amounted to misconduct on the part of Mr Gimson who appeared to have demonstrated no regard for his professional qualification. It was behaviour which fellow members of the profession would find deplorable and the Committee thereby determined that it amounted to misconduct. Exclusion of a member of the public 55. Mr Gimson gave evidence for the purposes of mitigation. During a break in his evidence, at the time when he was being asked questions by Mr Ozin, Mr Gimson alleged that Mrs F, who had attended the hearing as a member of the public, had threatened him. The alleged threat was overheard by Mr Young, Mr Gimson s representative. Both Mr Gimson and Mr Young provided the Committee with signed statements about what they said Mrs F said to Mr Gimson. Mr Hamer applied to exclude Mrs F from the hearing, but first applied for Mrs F to be excluded from the application to exclude her. Mr Ozin objected and argued that the only power to exclude Mrs F from the actual application would be under Regulation 11(1) and there would have to be exceptional circumstances to exclude the public from the hearing. 56. The Committee accepted the advice of the Legal Adviser and decided there were no exceptional circumstances for the application to exclude to be heard in private. 57. Mr Hamer then made his application to exclude Mrs F for the remainder of Mr Gimson s evidence. Mr Hamer submitted that his client now felt intimidated by the presence of Mrs F and unable to continue to give his evidence with her in the hearing room. 58. In the event, the Committee did not have to decide whether to exclude Mrs F because she voluntarily agreed to absent herself from the hearing during Mr Gimson s evidence. SANCTION AND REASONS 59. In reaching its decision on the appropriate sanction, the Committee took into account, and considered with care, all the evidence it had heard and read,

22 particularly the oral evidence given by Mr Gimson in mitigation and the defence documents provided. Those documents included two testimonials and a statement of means. The Committee also had due regard to the submissions made by Mr Hamer on behalf of Mr Gimson. 60. The Committee was referred to, and took account of, the Guidance for Disciplinary Sanctions ( GDS ). The Committee was aware that the purpose of sanctions was not to punish Mr Gimson, but to protect the public, maintain public confidence in the profession and maintain proper standards of conduct and behaviour and that any sanction must be proportionate. The Committee accepted the advice of the Legal Adviser. 61. The Committee considered the following aggravating factors: on the face of it Mr Gimson assisted Mr A to commit a criminal offence; Mr Gimson s status as an ACCA member clearly influenced the complainants decisions to become involved with Mr A; the damage and distress caused to Mr D and Mrs B and Mr E and Mrs F by the actions of Mr A, with which Mr Gimson knowingly involved himself; had it not been for Mr Gimson, Mr A would not have been able to exercise control and influence over the complainants companies in the manner in which he did; if it had not been for Mr Gimson, Mr A may not have been able to be concerned in the management of the companies in the manner in which he did; conduct continued over a period of time; and limited insight. 62. The Committee noted that the apparent criminal behaviour by Mr A of acting in the management of companies in contravention of his disqualification was assisted by the actions of Mr Gimson. The Committee did not accept the defence s assertion that Mr Gimson was somehow an almost innocent, naive participant in the schemes of Mr A, that were allowed to creep up on him. The Committee took account of the fact that Mr Gimson made a full admission to Allegation 1, including misconduct, and from the evidence put before it, and having seen and heard from Mr Gimson, the Committee was satisfied that he played an active and key role in supporting Mr A. Mr A was no doubt aware that the complainants would have been most wary about utilising his services in the knowledge that he was a convicted fraudster who was also disqualified from being a director for the maximum period possible, namely 15 years. To allay those fears Mr A put together a team with Mr

23 Gimson playing a key role, liaising with the companies and carrying out all the tasks referred to in ACCA s Report. As a member of ACCA, Mr Gimson added a veneer of respectability to Mr A s team, with the complainants being very much reassured by his membership of such a respected body. Thus it was that Mr A was able to further his dubious schemes involving, as they appeared to, the use of a fictitious Trust purely as a vehicle for fraud. 63. The Committee was satisfied on the evidence that Mr Gimson was aware of Mr A s criminal history and disqualification as a director from the outset of their relationship in February This was clear from his letter to ACCA at p370 of the bundle where he said by the time he first met Mr A he was aware of some of his background, namely that he had served time in prison and had twice been adjudicated bankrupt and disqualified as a director of limited companies for a period of 15 years. In his police interview at p713 of the bundle Mr Gimson said that he first met Mr A on 27 February It was also apparent from the police interview that he was still actively involved with Mr A in late November 2009 where he referred to sending an to Mr A concerning Company 12, another company in distress. In his oral evidence Mr Gimson accepted that he approached Mr A with a business proposal in November 2009 and yet, on his own account, he was by then distancing himself from Mr A having discovered he was becoming concerned in the management of the companies, contrary to his disqualification order. The Company 5 accounts also showed Mr Gimson drawing a salary up until November 2009 and there was an from Mr A to Mr Gimson on 23 December 2009 in connection with Mr D and Mrs B, setting out a list of tasks that Mr A required Mr Gimson to perform. The Committee rejected Mr Gimson s assertion that his knowing assistance to Mr A was for a much shorter period, which was inconsistent with the accounts he had previously given as referred to above and contrary to the documentary evidence. The Committee noted that Mr Hamer accepted that the period concerned was from March until December The Committee noted that Mr Gimson told the Committee that prior to linking up with Mr A, he was not operationally familiar with this area of work. It was therefore questionable why he would allow himself to venture into an area of work with which he was unfamiliar, and to do so with a

24 person with Mr A s background. The Committee noted the financial inducement of an annual salary of 100, The Committee found there to be the following mitigating factors: no previous disciplinary history, either before this matter or since; the early admission to Allegation 1; full cooperation with ACCA; significant delay in this matter being brought to resolution; two positive references; an apology to Mrs F; expressions of regret. 66. The Committee took into account all the mitigation but considered that, despite his admission, Mr Gimson had shown a lack of insight into his misconduct and had attempted to minimise his role in the whole enterprise by claiming to have thought he had been taking adequate steps to ensure a proper separation of duties and thereby avoid any conflict. Mr Gimson, in his second statement, even went so far as to say, if anything, [Mr A] is entitled to be commended for what he was endeavouring to do, even if his fees turned out to be somewhat on the high side. The Committee considered that this demonstrated a disturbing lack of insight and was quite extraordinary given what he said in the very next paragraph, namely that Mr A s actions depended on funding being secured by the Fermatt Trust and that there was never any question of an investment because the Fermatt Trust did not exist. 67. The Committee considered all the options available from the least serious upwards. The Committee considered a severe reprimand and the guidance at paragraph C4.1 of the GDS and decided that most of the factors referred to in (a) to (i) were not present in this case. The Committee concluded that the only appropriate and proportionate sanction was removal from the register. The Committee considered that for a professional accountant and Fellow of ACCA, to behave in this way and to assist another to commit a criminal offence was most grave and fundamentally incompatible with being a member of ACCA. It was such a serious departure from the relevant standards and such a serious breach of bye-law 8 that no other sanction would adequately reflect the gravity of the offending behaviour. It was not an isolated incident but rather one that was conducted over a period of nine months and had a significant adverse impact on the complainants, who had been influenced by the fact that he was a member of ACCA and in whom

25 they had placed their trust. The Committee considered that a failure to remove a member from the register who had behaved in such an deplorable way, would seriously undermine public confidence in the profession and in ACCA as its regulator. In order to maintain public confidence and uphold proper standards in the profession it was necessary to send out a clear message that this sort of behaviour would not be tolerated. 68. The Committee next considered whether it would be appropriate to fine Mr Gimson. The Committee noted that the ACCA Regulations on fines states that a fine of up to 50,000 may be imposed. The Guidance states that the level of fine will primarily reflect the gravity of the misconduct in question, but should also reflect any financial benefit obtained by the member. The Committee considered that Mr Gimson had derived a financial benefit from his part in working with Mr A and therefore considered it appropriate to fine him. In deciding on the level of fine the Committee took full account of Mr Gimson s financial circumstances and noted that he had limited means but significant assets. The Committee decided its starting point should be the 36,000 that Mr Gimson received by way of net remuneration as a result of his association with Mr A. The Committee then took into account Mr Gimson s means and assets and decided to fine Mr Gimson the sum of 7,500, which it considered both appropriate and proportionate in all the circumstances. ORDERS OF THE COMMITTEE 69. The Committee therefore ordered that Mr Gimson be excluded from membership of ACCA and that he pay a fine of 7,500. COSTS AND REASONS 70. ACCA applied for costs in the sum of Mr Hamer submitted, and Mr Ozin agreed, that the Committee could apply some discount to that figure to reflect the fact that Allegation 2 was found not proved following the submission of no case to answer. The Committee considered that both allegations were properly placed before it, but recognised that there was an overlap in the preparation of the case. Accordingly, the Committee decided

26 to reduce the sum requested to reflect its finding in relation to Allegation 2. The Committee thus made an order in the sum of 5,000. EFFECTIVE DATE OF ORDERS 71. This order will take effect from the date of the expiry of the appeal period referred to in the Appeal Regulations, unless Mr Gimson duly gives notice of appeal prior to the expiry of such period in which case it shall become effective (if at all) as described in the Appeal Regulations. Mr John Wilson Chairman 22 March 2016