Former bosses on fraud charges

THREE former directors of recruitment agency Corporate Services Group have been charged with fraudulent trading following a 19-month Serious Fraud Office probe.

John Abrahamson, ex-finance director Geoffrey Brailey and ex-chief executive Roger Eden appeared on Tuesday before Leicester magistrates. The charges relate to alleged accounting irregularities in 1997 and 1998 which emerged following a string of profits warnings in early 1999.

Corporate Services' auditor at the time was Arthur Andersen, now in crisis in the wake of the Enron scandal. The three directors left the group early in 1999, along with chairman Jeffrey Fowler who has not been charged.

After the concerns surfaced, Lord Ashcroft, then Conservative Party treasurer, launched a last-ditch attempt to keep Fowler at the company. Ashcroft's Carlisle Group offered to buy Corporate Services for £286m, but made Fowler's retention a condition. Other investors rejected the offer and instead brought in new chairman Michael Davies and chief executive Peter Owen to rescue the company.

Corporate Services said the charges 'will have no material adverse impact on its financial position or current trading prospects'.

Ashcroft raised his stake in Corporate Services last autumn to 6.39%. Activist investors Brian Myerson and Julian Treger of UK Active Value own 29%.