Two former directors of software company Torex have been jailed for fraud, following a trial at Oxford Crown Court.
Edwin Dayan and Christopher Ford, who were CEO and Finance Director respectively at Torex’s subsidiary firm XN Checkout, have been sentenced to 12 and six months’ imprisonment for the part they played in defrauding shareholders at the ex-AIM-listed company.
Ford’s sentence is suspended for two years but he has been banned from acting as a company director for two years, whilst Dayan has been banned from working on company boards for four years.
The pair caused more than £1.65 million in fictitious profits to be recognised within the published accounts of Torex, with their actions related to the company’s contract with pub and restaurant group Mitchells & Butler (MAB).
An investigation by the Serious Fraud Office (SFO), which began in January 2007, found that Dayan and Ford made it look as if MAB had agreed to pay financial sums that were not actually owed.
The alleged fraud took place when reporting year-end financial results in 2005 and continued in the publication of Torex’s 2006 interim accounts.
In passing sentence, HHJ Eccles QC said: “Unless directors recognise they will go to prison, the temptation to manipulate accounts in hard times will be harder to resist.
“Such sentences may seem harsh on a personal level, but a strong deterrent is needed.”
The matters under investigation relate to the historic business of Torex Retail plc, which collapsed and was forced into administration in 2007. They do not relate to the ongoing business of Torex Retail Holdings Limited and its subsidiary companies.
Eccles also noted that the SFO investigation into the conduct of other individuals involved with the former company is still ongoing.
Torex works with companies across a number of sectors, including baby and maternity product retailer Mothercare, chocolate specialist Thorntons and convenience store group Spar.