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Former iSOFT bosses charged with fraud

iSOFT bosses prematurely recognised revenues as market valued company at £1bn

The UK Financial Services Authority has launched fraud proceedings against four former directors of iSOFT Group.

Patrick Cryne, Stephen Graham, Timothy Whiston and John Whelan are to appear in court on 29 January to answer charges of making misleading statements to financial markets.

The action follows a three-year investigation of the company and relates to the recognition of revenues in accounts from the 2004 and 2005 financial years, when iSOFT was a key supplier to the £12.7bn National Programme for IT (NPfIT).

Cryne, who co-founded iSOFT, told the Financial Times that he had fully cooperated with the FSA and was "surprised and disappointed" at being charged.

When the alleged misstatements were made iSOFT was valued at £1 billion and was a subcontractor to CSC in the NPfIT. CSC is not involved in the alleged fraud and faces no criminal proceedings. It was subsequently taken over in October 2007 by Australian company IBA Group, which renamed itself iSOFT Limited.

The new iSOFT said, "None of the former iSOFT Group plc directors that were investigated are employed by iSOFT Group Limited or any subsidiary of the company."

The Australian-owned group had "cooperated fully with the FSA throughout the investigation, which involved former management of iSOFT Group plc and had no bearing on any of the current management or employees of iSOFT Group Limited".

Gary Cohen, iSOFT Group Limited executive chairman and CEO, said, "The FSA result brings to a conclusion one of the remaining legacies of the former iSOFT."

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More about: CSC, iSoft, OFT
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