Former FD of Luton Town thrown out of ICAEW

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The former finance director of Luton Town Football Club has been thrown out of ICAEW for misconduct during his time at the club

A disciplinary committee tribunal decided that, given the “grave seriousness” of Derek Peter’s offences and “the discredit this is likely to have been brought to himself, ICAEW and the profession, no lesser sanction than exclusion would suffice”.

In 2007 Peter – a former KPMG partner and ex-finance director of Tottenham Hotspur – and three fellow Luton directors were charged by the Football Association with making illegal payments to secure the services of various players. They were accused of making nine different payments, totalling around £160,000, through the club’s holding company, Jayten Stadium Ltd, to six licensed players’ agents – including the agents of Ashley Cole and Jermain Defoe – without disclosing them to the FA. They were also accused of providing the FA with misleading information.

A week after the FA announced the charges, Luton Town went into administration.

Peter, who was accused of approving the nine payments, was found guilty by the FA regulatory committee of seven charges of misconduct in 2008. He was fined £3,750 and suspended for all football and football activities for a period of one year.

The matter was then referred to ICAEW.

His file was later put on hold until the outcome of an investigation by the Insolvency Service into what had gone on at the club. In September 2011, he was disqualified from acting as a company director for seven years.

The High Court identified three areas of concern regarding Peter’s behaviour that suggested that he was unfit to be concerned in the management of a company. It found that, between July 2004 and February 2007, he caused the company, as operator of Luton, to act in breach of the FA and FIFA rules and regulations on payments to football agents (by making payments through JSL).

“In reaching a conclusion of unfitness arising from these matters,” the court said, “it is necessary to take into account that in respect of the issue regarding the breach of FA rules, the FA considered that [another director] was principally responsible, but the next most culpable was Peter.

“In particular, Peter demonstrated a failure to familiarise himself with the rules at a time when he was acting as the finance director and that amounted to a failure to exercise reasonable skill and care on behalf of the company. It was Peter who signed the cheques in favour of the agents and failed to ensure that payments were made through the FA in accordance with those rules.”

The court also found that over a three-year period until he resigned in June 2007, Peter had allowed the company to build up a liability to HMRC of £3,578,661.

He had particular detailed knowledge of the financial affairs of the company at all times. “The inescapable conclusion is that during Peter’s tenure as financial director, his approach resulted in the company’s debt to HMRC, who were one of the company’s largest creditors, increasing substantially at the risk of HMRC.

“Although the ultimate level of the HMRC indebtedness may have been partly achieved by the subsequent events and in particular the administration, the increase in the indebtedness to HMRC during Peter’s term of office demonstrated a repeated failure to make payments on time and a failure to ensure that the company complied with its statutory duties.”

The third area of concern the court highlighted was that he had caused Luton to enter into a transaction that was detrimental to its creditors and to the specific benefit of a connected entity where he was a director. The transaction resulted in the company repaying an unsecured debt out of its limited resources at a time when Peter knew it was unable to pay its debts.

When the institute contacted Peter, he told the case manager that the court judgment had overlooked all the defences that he and his co-directors had put forward and that he was “not minded to enter into any further correspondence”. He did not attend the tribunal hearing.
As well as the exclusion order, the tribunal ordered him to pay costs of £3,000.

It also recommended that no application for his readmission as a member should be entertained for at least seven years.

Julia Irvine

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  • Comment by Luton Supporter

    No application for his re-admission should be entertained, ever.