Accountancy body criticises Powerscreen for irregularities

The chief executive and financial director of former high-flying engineering firm Powerscreen have been reprimanded by the accountancy regulatory body, the Institute of Chartered Accountants in Ireland (ICAI).

The reprimands against Shay McKeown and Barry Cosgrove come eight years after accounting problems first emerged at the Dungannon-based firm. The ICAI also admonished Noel Whelan, financial controller of Matbro, the Powerscreen subsidiary that was the source of the £47 million (€68 million) accounting irregularity at the centre of Powerscreen's difficulties.

The committee of inquiry found Mr McKeown, as chief executive of Powerscreen, was aware of "a major accounting breakdown" at Matbro. Mr McKeown also failed to make sure the problem was highlighted before Powerscreen raised about £19 million by issuing shares in December 1997, the committee found.

Mr McKeown, who was declared not guilty in UK fraud proceedings in 2004, was ordered to pay €5,000 towards the costs of the ICAI's inquiry.

Mr Cosgrove was also found to have been aware of the irregularity and to have failed to have highlighted it. He was ordered to pay €5,000 towards costs. Mr Cosgrove was also declared not guilty in the UK in 2004.

Mr Whelan, who successfully applied to have UK charges against him dropped, was found by the ICAI to have failed to exercise "the due skill, care and diligence" expected of an institute member.

He was told to pay €2,500 towards the costs of the inquiry, which was established in 1999 but suspended while the UK proceedings were ongoing.

In 2002, the ICAI reprimanded accounting firm KPMG and Saunders Graham - a former audit partner at the company - following an investigation connected to Powerscreen.