The Audit Committee commissioned the review into the circumstances concerning a breakdown in internal controls which resulted in the incorrect application of the Group’s impairment policies.
On 3 March 2009, the Board of Cattles announced the suspension of three senior executives of its main trading subsidiary, Welcome Financial Services Limited ("Welcome"), pending the outcome of the review. On 10 March 2009, the Board further announced the suspensions of James Corr, Finance Director of Cattles plc, Ian Cummine, Chief Operating Officer of Cattles plc and Chairman of Welcome, and another senior executive of Welcome.
Following the Board’s consideration of the results of the independent review, the employment of each of these six suspended senior executives has been terminated with immediate effect. In addition, Mark Collins, currently Treasury & Risk Director of Cattles plc, is leaving the Company with immediate effect. None of the departing executives will receive any compensation for loss of office.
New Management Structure
The Board of Cattles continues to improve the stability and control of the business to provide a solid platform for the Group’s future development. It is therefore making changes to the operating structure of the Group and to the composition of both the Cattles plc Board and the Board of Welcome.
Margaret Young, currently a non-executive director and Chairman of the Audit Committee, has been appointed Executive Chairman of Cattles plc. She will be supported in that role by Robert East, who will continue to lead Cattles’ discussions with its banks, bondholders and note holders, and has agreed to join the Cattles Board as Chief Restructuring Officer immediately after the forthcoming AGM on 29 July 2009. Margaret will be further supported by Jamie Smith, who became interim Finance Director in April 2009.
The Board previously announced that Norman Broadhurst would not seek re-election at the AGM, either as Chairman or as a director of Cattles plc. Norman has now decided to step down as Chairman and as a director of Cattles with immediate effect.
David Postings has also decided to step aside as Chief Executive and will leave the Group immediately. However, to assist with an orderly handover, he has agreed to be available to the Company on a consultancy basis for a period of six weeks.
The Board of Welcome will also be restructured, with the appointment of Laura Barlow as Executive Chairman. Laura will assume this role in an interim capacity and will remain a partner and a managing director of AlixPartners, a leading international firm of restructuring experts. Paul Mackin becomes Managing Director of Welcome. These two appointments are subject to the necessary FSA approvals.
The Board’s focus continues to be on working closely with its debt providers to secure their support for the Group’s programme of action to stabilise its financial position. On 22 June 2009, Cattles issued a statement confirming that it is in constructive discussions with its debt providers with a view to obtaining a standstill agreement. These discussions continue. It’s believed that its business as usual at Cattles Invoice Factoring.