Print Published 31st Dec 2018, 00:01

Freud’s accounting manoeuvres: explain or desist

Any company that feels the need to change its year end date by just one day on four separate occasions in the last two years is either experiencing some very peculiar circumstances or is likely to be suspected of exploiting a weakness in company law so as to delay publishing its results for as long as possible.

So which scenario applies to the antics of Freud 3.0 that are reported elsewhere in this publication (see Freud engages in quarterly accounting date antics yet again)?  And why is the law so loose that anyone can delay filing its accounts by three months simply by changing the year end date by one day?

The question has been asked by this publication on a number of occasions, so far without any convincing response from the Registrar of Companies (see Another reminder that company law needs strengthening).

Freud 3.0 has not felt it necessary to explain its antics either.  All we do know is that, in relation to the 2016 accounts, it eventually emerged that the group had written off nearly £6 million on selling the yacht Kingdom Come that had been bought from a partnership controlled by Freud himself.  The disposal of the yacht was the principal cause of the £4.1 million loss recorded by Freud 3.0 in that year (see Freud group loses £6m on sale of yacht bought from Matthew Freud).

Clearly the current filing law is open to unnecessary abuse.  Its continuing and blatant exploitation by Freud 3.0 should either be justified by substantive and relevant explanations, or the law should ensure the company will be heavily punished.

It is mildly encouraging that the Department for Business, Energy and Industrial Strategy has undertaken to consider the representations made on the matter by Marketing Services Financial Intelligence.  It would be even more encouraging to see some more political energy applied towards the issue.  Action on improving corporate accountability is just one aspect of Government that seems to have been buried under the deluge of diversionary activities prompted by the Brexit nightmare.

Meanwhile companies like Freud 3.0 can continue to make the law into an ass or – worse still – a pantomime horse, inside which Government ministers are doing everything they can to kick all “non-urgent” legislation into the long grass.  In the language of the pantomime season, it is high time creditors, customers and the wider public passed judgement on whether the current loose reporting framework is to be tolerated and shouted with great gusto: “Oh no it isn’t!”