Michael Reid

The penalty was imposed by the ICAS Authorisation Committee in December 2024 but was not made public until this morning, when a summary of the complaint was published by the Insolvency Service.

Mr Reid, who headed Aberdeen-based Meston Reid & Co prior to its merger with MHA in October 2023, was given a sanction of £1,500 in respect of one issue which was judged to be “less serious” and sanctions of £5,000 each in respect of two issues which were judged to be “serious”.

The first of the three issues concerned a failure to maintain adequate and compliant time records, as required by Statement of Insolvency Practice 9.

As there was no evidence of any prejudice to creditors or other third parties as a result of the failure to maintain adequate time-recording records, the committee determined that the starting point sanction of £1,500 should be applied.

The second issue concerned a failure to review or verify employee claims against payroll or other appropriate documentation, and to notify the Redundancy Payments Service that claims were not verified.

The committee said the verification of employee claims is “an important issue given the potential for fraudulent activity” and Mr Reid should have been “aware of his responsibilities in this area”.

It therefore assessed the level of seriousness of the conduct as “serious” and determined that the starting point sanction of £5,000 should be applied.

The third issue concerned a failure to document investigation work to support conclusions reached, including investigations into the validity and potential misuse of a Bounce Bank Loan.

The committee assessed the level of seriousness of the conduct as “serious”, noting that there was very little evidence of investigation work carried out in the cases which were reviewed.

The investigation work should have been “more comprehensive” and should have “included a review of bank statements and other relevant records”, which should also have been documented, it said.

The committee therefore determined that the starting point sanction of £5,000 should be applied.