Sanctuary Group has dismissed its chief executive, Andy Taylor, in an attempt to draw a line under a year that saw the music group undergo a radical financial restructuring after a share price crash.
Sanctuary, whose clients include acts such as Beyonce, Coldplay and The Strokes, decided to remove Mr Taylor, who co-founded the company in 1976, following the appointment in April of Bob Ayling, former chief executive of British Airways, as chairman.
Mr Ayling was brought in by shareholders after a rescue fundraising in March, which involved the company raising pound stg. 110 million ($270 million) through a deeply discounted share placement and the cancellation of some of its debt.Mr Taylor, who was executive chairman of Sanctuary, gave up the chairmanship when Mr Ayling arrived, but remained as chief executive. Under Mr Ayling, the Sanctuary board had been conducting a review of the company's financial statements for the past few years. It said the review had been prompted by questions from the Financial Reporting Review Panel, the regulator that investigates accounting irregularities.
It queried the group's accounts for the year to September 2005. In those figures, the company included a substantial restatement of the prior year's figures. At the time, Sanctuary said it would restate results to address concerns about past accounting policies covering commission income in the artist management business and revenue and expense recognition in the recorded product division.
However, in mid-February, Baker Tilly, Sanctuary's auditors, announced the accounts for the year to September 2005 had understated the company's full-year pre-tax losses by almost pound stg. 16 million. The Sanctuary board decided that, as a result of its review, the accounting policies adopted by the company in the 2005 financial statements were appropriate and no adjustments were required to be made to the balance sheet.
It said that the profit and loss account for the year to 2005 might be adjusted as a result of exceptional items. Mr Taylor started his music management company with Rod Smallwood, a friend whom he met while attending university. He managed acts including Iron Maiden and built Sanctuary into a leading independent music company. He was the architect of the "360 degrees" music group, with operations ranging from recording to artist management, music publishing and rights management.
However, over-expansion and an aggressive push into the US led to mounting debts at the company. Sanctuary said Frank Presland, chief executive of Twenty-First Artists Management, which was bought by Sanctuary last year, would take over as chief executive. Twenty-First Artists manages acts including Elton John and James Blunt. Sanctuary shares rose 1p to close the London trading session at 47p.
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