Wed, 25 April 2012

Kate Bleasdale, the founder and former executive vice chairman of Healthcare Locums (HCL), should have considered resigning after the discovery of serious problems with the company’s accounts, an employment tribunal heard yesterday.

HCL non-executive director, David Henderson, yesterday told the tribunal in which Kate Bleasdale is suing HCL and several former colleagues for £12m in damages, that given the seriousness of the situation, which emerged at a budget meeting on 22 December 2010, Bleasdale’s actions were “underwhelming”. And he said that given the circumstances she should have considered resigning.

Henderson originally worked as a consultant/advisor for HCL before being appointed a director in February 2011. He was also the appeals officer, who upheld Bleasdale’s dismissal in March 2011.

In his witness statement, Henderson says: “Warren House [where the meeting was held] was a seminal moment. At that point Kate understood without doubt that the accounts were wrong, but what action did she take.”

Cross-examining Henderson yesterday, Bleasdale defended her actions following the meeting, at which she said the accountants had described the accounts as “as clear as mud”.

“The action I took was to ask the accountants to go away and investigate, to get rid of the mud, so we could see what was happening to the accounts,” Bleasdale told the tribunal.

And Bleasdale said that after going through the issue with finance director Diane Jarvis on 9 January 2011, she had reported the findings to the HCL board. Last week Bleasdale told the tribunal that she hadn’t receive a full answer to her questions until 22 January.

However, Henderson responded: “I would have expected more urgent action rather than for it to come out one month later.

“What I found amazing was that there wasn’t far more urgent action in December and January. I would have expected a normal company to have held an Extraordinary General Meeting and a meeting of the audit committee.”

And he suggested that in the period between the 22 December 2010 meeting and 9 January 2011, there could have been a false market in HCL shares.

Henderson said he saw clear evidence of the seriousness of the situation facing the company, citing “a series of emails that all pointed to a black hole” in the accounts. “These are huge numbers,” he said.

And he said that given that Bleasdale had said that she hadn’t trusted her finance director Diane Jarvis for a year, this was a situation when Bleasdale should have considered resigning.

Bleasdale told the tribunal: “I did resign in January 2011. I did resign but I was persuaded to stay so they [the HCL board] could do it in a more spectacular fashion.”

The tribunal continues today.