The chairman of Healthcare Locums (HCL) has refused to rule out the possibility of bringing in the police following the discovery of a number of “serious accounting irregularities” and other financial issues at the firm.

Among the irregularities discovered during an internal investigation were double counting of invoices and fictitious invoices in relation to an invoice discounting facility with Barclays Bank.

In a separate investigation launched in response to the findings of the internal investigation, accountants Grant Thornton were engaged by HCL in April 2011. According to HCL, Grant Thornton has identified evidence that suggests that in the past HCL did not fully comply with NHS framework agreements.

When asked by Recruiter whether HCL has brought in the police, Peter Sullivan said: “No, not yet.” He added that HCL “reserved all its legal rights in a legal sense” with regard to possible action against individuals. 

“If we manage to get through this general meeting, we will consider our position then,” Sullivan went on to say, referring to a general meeting to be held in September to discuss proposals to refinance the company.

Sullivan acknowledged that HCL continued to charge a major NHS customer on a higher margin pricing model even after low margin NHS framework agreements came into place. No further information was available about the period involved.

Sullivan told Recruiter that HCL continued to charge Birmingham NHS Cluster a higher margin by using a more flexible open contact pricing model. “We failed to move our business in line with the market,” he said. Sullivan confirmed that HCL subsequently reimbursed Birmingham NHS Cluster £200,000.

Sullivan said he didn’t know in detail whether HCL’s problems had damaged business with individual clients in the UK. “HCL is continuing to trade well,” he said.

However, in a statement to the London Stock Exchange last week, HCL recognised the possibility that non compliance with NHS framework agreements could damage its business.

“The NHS may consider that it is in a position to terminate the group’s ability to provide services under the framework agreements on the basis of the group’s historical performance of those contracts. 

“Alternatively, for the same reasons, it is possible that the NHS may bring proceedings against the group for breach of contract or seek to move business away from the group in the future by procuring services from providers outside the group. In each case, this could have a material adverse impact on the business,” the HCL statement said.

As recruiter.co.uk went to press, neither Birmingham NHS Cluster or the Department of Health had responded to requests for comments.