The board of Healthcare Locums (HCL) attempted to cover up fraud at the company by "getting rid of" the company's founder, an Employment Tribunal has heard.
In her third day of
giving evidence at her £12m case, Kate Bleasdale, the former executive vice-chairman and founder of HCL, accused the board of destroying £112m worth of value in HCL and of "completely destroying her reputation".
Bleasdale's claims relate to a series of events in December 2010 and January 2011, which led to her suspension from the company, and the suspension of HCL's shares on AIM, which were announced to the City on 25 January 2011.
"I knew I had been hung, dried and quartered, tried and found guilty," Bleasdale told the tribunal.
And she claimed that after first becoming aware of fraud at HCL in March 2010, the HCL board “chose to cover it up” and that in January 2011, “they chose to cover it up by getting rid of me”.
"I don't believe that I should have been suspended because it was I who brought the matter to the attention of the board because of intense digging," said Bleasdale.
This was in reference to a request she made to HCL's accountants on 22 December 2010 to provide a full explanation as to why there was a discrepancy between the company's overheads of £23m in the September 2010 accounts and the true figure, which as Recruiter reported on Monday, Bleasdale believed “was more like £35m”.
But Emma Smith, representing five of the six respondents, suggested that Bleasdale was not interested in "why there is such a disconnect between the management accounts and the actual [figure]”.
"You were looking at ways to increase profits not asking why there was a gap between the actual figures and the figures in the accounts," said Smith.
Smith claimed that this included capitalising costs inappropriately – that is putting them on the balance sheet rather than treating them as an expense, and including revenue from permanent placings as income before the money had been received. These actions were carried out with the intention of inflating HCL's earnings so as to meet the City’s expectations, claimed Smith.
During her cross-examination by Smith, Bleasdale described a meeting in January 2011 in which she accused Diane Jarvis, HCL’s former finance director, of fraud. Bleasdale said this related to an increase in revenue from permanent placings from £4.7 to £6.7m. "I accused her of fraud. I asked her: ‘how on earth can you increase permanent placings from £4.7m to £6.7m?’" said Bleasdale.
However, Smith told the tribunal that at the meeting Jarvis told Bleasdale that "every figure had been agreed with you and that she had been instructed to do this by you".
Bleasdale denied that Jarvis had said this at the meeting.
But Smith responded: "What motivation did Diane Jarvis have to make these accounting irregularities if they weren't done at the behest of someone else?"
Bleasdale also denied a suggestion in an email from Jarvis, which referred to "getting the paperwork in line” and suggested that she had asked staff to make up time sheets.
"Making up time sheets is not something that I have done or would ever do," said Bleasdale.
And Bleasdale hit back by telling the tribunal that the HCL board “all knew about the fraud in March 2010 and chose to cover it up”.
This was in reference to an email discovered by HCL’s auditors BDO, which as
recruiter.co.uk reported on 13 April,
suggested placement of three medical staff in the Middle-East had been fraudulent. This was followed by a meeting in March 2010, during which Bleasdale claims Jarvis told the board “I have lost my accounting ethics” and that she “had actively requested staff to make this email up”.
Concluding her cross-examination Smith told Bleasdale "there was plenty of motivation" for her to adjust the figures, so as to meet the expectations of the City.
"The reason why you were suspended and dismissed was because of your conduct," said Smith.
Bleasdale, who was dismissed by HCL on 11 March 2011, is claiming £12m in damages against her former company and a number of former colleagues for unfair dismissal, victimisation and sex discrimination.
The tribunal continues.
