In 2005, VOC Spares Liaison Officer and VOCSC Director Dick Wheeldon described VOCSC Ltd turnover as “the best ever”, with monthly sales reportedly averaging £18,000. Prior to the AGM, however, VOC Secretary Andrew Everett had circulated the following statement about the then VOC Treasurer Roy Huxley on behalf of the VOC's Executive Committee:
In 2010, Mr Huxley wrote publicly: "Since resigning from the VOC Executive Committee, (due to major problems in trying to work with an obstructive bullying Chairman), I have tried to distance myself from anything to do with the running of the Club and Club politics as the Chairman made my tenure as Treasurer so traumatic that my health suffered and I was obliged to pull right away from anything to do with the VOC."
Roy Huxley had expressed concerns about the VOCSC Ltd’s accounts, stating that he had been refused access to the full accounts by Tim Kirker and George Spence. Mr Huxley wrote to the VOC journal MPH about his concerns but his letter was not published by the then Editor, Robert Watson, also a member of the club’s Executive Committee. In other words, the dissenting views and opinions of one of the Vincent HRD Owners Club executives, the Treasurer nonetheless, were suppressed and withheld from the club’s membership.
The auditors who did sign the 2003/2004 VOCSC Ltd accounts off subsequently agreed that their audit was not correctly carried out and refunded the fees they had received, thereby vindicating the concerns of two professional accountants regarding that year’s accounts and calling into question the motives of VOC executives who prevented the club’s Treasurer from doing his job, pushed to have the accounts approved and tried to gag anyone raising objections. John Smith-Daye, the chartered accountant and VOC member who would later question the 2008/2009 accounts in 2010, was also concerned about the 2003/2004 accounts, especially by an article published in MPH stating the the 2003/2004 accounts of the VOC Spares Company Ltd included a £49,000 stock adjustment but that nobody should worry as it was only a “paper adjustment”. The article was written by George Spence, Managing Director of the VOCSC Ltd and Vice-President of the Vincent HRD Owners Club, which is the largest single VOCSC shareholder. Mr Smith-Daye duly tabled his concerns ahead of that year’s VOCSC Ltd Annual General Meeting.
VOC General Committee Meeting 11th September 2005
Proposed Agenda items originating from John Smith-Daye FCA, member no. S436
Andy Everett has kindly agreed to put the following two proposals on the Agenda on my behalf, for discussion at the GCM. I feel that it is appropriate for me to expand a little on my thoughts in writing, in case I am unable to attend the GCM in person.
1
- That the full financial statements of the VOCSC Ltd be formally made available to, reviewed by and commented on by, the Treasurer of the VOC as the appointed financial officer of the Club, at the earliest possible time they are available and in any case prior to recommendation by the EC for the adoption or otherwise at the Company’s Annual General Meeting.
I became concerned at the contents of the VOCSC Ltd accounts following George Spence’s brief article in MPH which basically said that there had been a £49,000 stock adjustment in the accounts for the year to 31st October 2004, but don’t worry, it is only a paper adjustment. My initial comments are a matter of record as they were published in April MPH – in simple terms, I was worried. Subsequently, I obtained a full copy of the accounts and attended the VOCSC Ltd AGM and I remained worried.
I understand that the appointed financial officer of the Club, the Treasurer Roy Huxley (like myself, a professional accountant) had also expressed concerns at the Company’s financial position. I also understand that he was refused access to the full accounts for the year to 31st October 2004. Having spoken to Roy, I note that he agreed with the thoughts in my letter to MPH, and did not support the response printed and signed by Tim Kirker and George Spence. Indeed, I understand that his (alternative) views were passed to Robert Watson in good time for publication, but not published, such that a balanced view was not given of the Exec’s thoughts.
In appointing the Treasurer, it is surely taken as read that the Club will consult him on matters financial, as well as expecting him to raise concerns and provide advice in this area based on his training and experience. The Club is fortunate in having Roy Huxley as Treasurer, as he is a professional accountant (and auditor), and his opinions, advice and guidance should thus be strongly considered when decisions are to be made concerning the Club’s finances. The accounts for the VOCSC Ltd for the year to 31st October 2004 as presented are factually incorrect and the auditors should not have signed them off as showing a true and fair view of the results for the year – they themselves have accepted that the audit was not correctly carried out and have refunded the year’s fees. Had the Treasurer been allowed full involvement, I am of the opinion that this situation would not have occurred – hence the above proposal.
2.
- In the light of comments made at the VOCSC Ltd AGM in April 2005 by Mr G Spence as Chairman of the Company suggesting that stock had not been correctly valued for accounts purposes for a number of years, that the VOC as a majority shareholder suggest that he stands down as Chairman of the Company.
There is no dispute that the stock figures in the accounts of the VOCSC Ltd have been incorrect in the past, leading to inflated profits being reported. The Companies Act 1985 is clear in its statements on areas relating to this problem. In particular, there is a duty under Section 221 to keep accounting records showing stock held by the company at the end of each financial year. This duty has been breached, and the officers of the Company could be liable to severe punishments if action is taken. The effect of the stock figure included in a set of accounts can be significant, and is in this case.
Section 226 of The Companies Act 1985 requires the directors of a company to produce annual accounts that give a true and fair view of the state of the company (the balance sheet) and of its results for the year (the profit and loss account). By preparing accounts with significantly incorrect stock values, the directors have also breached this duty.
The directors have, at best, been incompetent in carrying out their duties, or, at worst, have intentionally misled by preparing incorrect accounts. As Chairman of the Board of Directors responsible for these severe breaches of duty, Mr G Spence should stand down.
John Smith-Daye
12th August 2005
At the 119th GCM of the Vincent HRD Owners Club on 11.9.2005, the Executive Committee was asked how much of the projected VOCSC turnover that year of £220,000 would be turned back into stock and members were told that most of this income would be reinvested in stock. At this point, according to the minutes of the meeting, former VOC Membership Secretary Rod Hornsby pointed out an anomaly, suggesting that this meant that the VOCSC Ltd would actually show a loss over the previous twelve years. VOC Chairman Tim Kirker responded by saying that this was an issue not worth pursuing before telling the assembly that VOCSC Ltd shares had dropped in value. Today, of 100,000 authorised Ordinary Shares, 58,474 are currently allotted to just over 800 shareholders. Fifteen sections of the Vincent HRD Owners Club in the UK, USA and Canada are listed as holding a total of 766 of these shares. The Vincent HRD Owners Club is the largest single shareholder with 26,622 of these shares, representing roughly 45% of the company's issued share capital.
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