DTI to investigate HTS
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• Mr Peter Walker, Secretary for the Department of Trade and Industry, has authorized an inquiry into the affairs of Ralph Hilton Transport. Mr Benet Hytner QC, and Mr Ian Irvine, a chartered accountant, have been appointed as inspectors.
Proceedings are being instituted under 165b of the Companies Act 1948. Under this section an investigation may be authorized if the DTI considers that there are circumstances suggesting that a company's business "is being conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive of any part of its members or that it was formed for any fraudulent or unlawful purpose; or (ii) that persons concerned with its formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards it or towards its members; or (iii) that its members have not been given all the information with respect to its affairs which they might reasonably expect."
Following the intimation that the DTI was to hold an inquiry, Mr James McNaughton who replaced Mr Hilton as chairman on the HTS board, issued the following statement "The Board of Hilton Transport Services confirms that the Department of Trade and Industry has determined to undertake an investigation into the affairs of the company in pursuance of its statutory powers."
The investigation comes as no surprise to the newly constituted HTS board who reported to shareholders earlier this year that the group had lost £1.1m in the period ended July 31 1972 and that pre-tax profits for prior years had been overstated
by some £260,000, part of which was attributed to fictitious sales invoices.
The Board, whose constitution was confirmed by the company's shareholders at its annual general meeting on May 22 1973, after the resignation of its former chairman and managing director, Ralph Hilton, is confident whatever the difficulties in the past, the group's present affairs are being satisfactorily handled.
Although the new Board would not have caused a further investigation to occur, it does appreciate and understand the reason for the statutory powers of investigation being conferred upon the Department of Trade and Industry, their powers being for the protection of the public against acts which might be deemed to be designed to deceive or defraud. It is because of the Board's appreciation of this that it is its intention to co-operate wholeheartedly with the inspectors' investigation.
Peat Marwick and Mitchell, the accountants, were called in to investigate the Hilton's accounts in the latter half of 1972. But its report will not be published. Mr McNaughton, however, stated in the company's annual report for 1971-72 that the results were based on incomplete information and in particular that £68,302 unsupported sales invoices had been credited to income. The previous year the company announced that profits had been overstated and that instead of £219,360 the net earnings should have read £51,172.
The company's share quotation was suspended in July 1972. Mr Ralph Hilton, the founder, resigned as chairman and from his seat on the board in April this year.
Mr Hilton told CM: "I welcome the inquiry as I am sure it will help to clear matters up."