Tribunal imposes gag to protect PPCS

By Rob Hosking

Friday 15th August 2003

Meat company PPCS succeeded in getting a disciplinary hearing against its auditor, Ernst & Young accountant Ken Fergus, heard in secret despite objections from the Institute of Chartered Accountants (Icanz).

The charges against Mr Fergus, which he denies, allege negligence or incompetence and conduct unbecoming an accountant. They claim that in his role as auditor of PPCS he ignored several failures of disclosure by the company.

The charges brought by the former chief executive of meat rival Richmond, John Foster are part of a five-year takeover battle between PPCS and Richmond that has taken the companies to the Court of Appeal and led to senior PPCS executives being described by a judge as uttering "repeated untruths."

Icanz's disciplinary tribunal sat in Wellington this week to hear the charges but lawyers representing PPCS and Mr Fergus succeeded in turning the process into a private hearing.

PPCS lawyer Andrew Harmos said details of the charges contained allegations that were "quite pejorative of PPCS," going well beyond that already stated in other hearings before the High Court.

And, reflecting the high level of PPCS' sensitivity, he twice referred to the risk of a "barrage of publicity" surrounding the PPCS-Richmond dispute.

He also noted that the Court of Appeal was deliberating on that case, and that further media comment might "create pressure, unnecessary pressure in what has been a long-running and bitter dispute."

For Mr Fergus, Ed Wylie QC argued that there had already been adverse publicity in the past month and that this was having a detrimental effect on Mr Fergus and his family.

"We are seeking prohibition of publication of what takes place in these proceedings ... because unless it happens there will be extensive publicity.

"That publicity is associated with the PPCS/Richmond debate into which Mr Fergus has been drawn."

Icanz's counsel, Michael Reed QC, argued against holding hearings in private. Many of the matters relating to PPCS have already been written extensively about, he said.

"To suggest these matters are not already in the public domain is simply not sustainable ... It would be entirely artificial to try to provide the outcome sought by PPCS. The High Court decision is already there."

And as for the claim that the Court of Appeal's decision might be affected by publicity about the disciplinary action against Mr Fergus, Mr Reed said he found that "astounding."

The institute's rules prescribe that the hearings be held in public unless there is good reason not to, and that there is a presumption that it is in the public interest to do so.

The five tribunal members chairman Tony Frankham, Marsden Robinson, Angela Hauk-Willis, David Macdonald and Gary Leech were split on the issue but a majority opted for suppression.

The reasons were to protect PPCS, not Mr Fergus, Mr Frankham said in delivering the decision.

"The tribunal is satisfied that it is in the interests of PPCS for the hearing to be held in private ... we do not make this order on the basis of the submissions for Mr Fergus about significant adverse effect on Mr Fergus and his family."

[Proceeding]

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