FSA launches iSoft charges

The Financial Services Authority (FSA) has started criminal proceedings against four former directors of iSoft, an IT firm involved on the flagship and much criticised NHS National Programme for IT.

Isoft's ex-chairman and founder Patrick Cryne, former chief executive Timothy Whiston and ex-directors Stephen Graham and John Whelan have been summonsed to appear at City of Westminster Magistrates' Court on 29 January on charges of conspiracy to make misleading statements to the market.

The company had alerted the FSA after its own investigations in 2006 found evidence of irregularities affecting the financial years ending April 2004 and 2005. The company restated results relating to earlier years meaning that £174 million of revenues booked since 2003 had to be realised in future years instead.

The FSA began investigating iSOFT in 2006 after it told the London Stock Exchange that it had been booking profits relating to the NHS project when the contracts were signed rather than when it actually received payment. The group revealed mammoth net losses of £382.2 million for 2005 after writing down the value of a major acquisition it made in 2004, wiping out previously reported profits.

Cryne, who is the owner of Barnsley Football Club, said: "Since the FSA commenced its investigation into the affairs of iSoft Group Plc it has had my full and complete co-operation. I am surprised and disappointed at the position arrived at by the FSA. I am however absolutely satisfied that in due course my position will be completely vindicated."

The company once counted former CBI director-general Sir Digby Jones as its senior non-executive director and former chief executive of BAE Systems John Weston as its chairman. ISoft, based in Banbury, has since been sold to Australian software firm IBA Health, which renamed it iSoft Ltd after the takeover in October 2007. iSfit Ltd is not implicated or connected with the ongoing investigation.