LONDON (Reuters) - The head of Britain’s horsemeat scandal restaurant operator Brakes Group has been hit with a total of 8 million pounds of fines by three Ofsted inspectors, who accused him of a “flawed and slow response” to the fallout.
FILE PHOTO: A sign and horse branding are seen outside a restaurant in London February 25, 2013. REUTERS/Paul Hackett/File Photo
The inspectors, reviewing financial management at Brakes’ parent company Brakes Restaurant Holdings (BRKRC.L), which had only publicly announced the affair days earlier, rejected the company’s attempts to block their probe and said they would call witnesses to explain discrepancies in accounts.
Brakes, which provided meat to other British restaurants, was fined more than 5 million pounds last year for using horsemeat to fill burgers in meals sold in supermarkets.
But Brakes appeared to go back on its vow to get to the bottom of its accounting scandal, when it, like most others who sold products with horse meat in them, accepted it had not reported any problems to the relevant authorities.
“Despite being aware of some accounting irregularities prior to Brakes’ entry into administration, there was a lack of transparency about what controls existed and what management priorities were,” a report from the inspector’s said.
“The directors expressed a view that there was insufficient information available,” the report said.
Brakes Chief Executive Andy Dixon and two non-executive directors, Robert Stock and Carole Read, were fined a total of 2.6 million pounds, the Ofsted inspector said.
The company’s financial director Laura Latham was fined 200,000 pounds.
Latham subsequently resigned. Dixon also stepped down in August after Brakes was put into administration.
“We take very seriously the issues raised with us during our recent operational restructuring,” Brakes said in a statement on Tuesday.
“We’ve implemented a full investigation to ensure that our practices and procedures, including financial controls, are up to the standard required by regulators and our colleagues.”
Brakes had hired Grant Thornton to investigate the issue, as it was still making the checks it first disclosed in February and because it still wanted the matter to be resolved.
Grant Thornton had launched an initial review into the matter. But when Dixon went, the company said it wanted to offer its own investigation, overseen by Richard Hearne, a partner at Grant Thornton.
Hearne’s review was overseen by independent third parties. The report said Dixon “no longer agreed with or supported this review.”
The inspectors described Dixon’s resistance to their probe as “contrary to the integrity and rule of law.”
Brakes has been trading under the name Brakes Restaurant Holdings since its 2012 purchase of Brakes Restaurant Management (BRM), which itself was acquired by Brakes in 2011.