ISoft four trial due to start today

A jury is due to be selected today to try four former senior directors of iSoft, who are accused of misleading investors about the financial state of the company in the middle of the last decade.

Prosecutors say Patrick Cryne, Stephen Graham, Timothy Whiston, and John Whelan issued misleading forecasts about the financial health of the company when they claimed they had won a major contract to supply information systems to Irish hospitals before 30 April 2005.

The company alerted the Financial Services Authority after its own investigations found evidence of irregularities affecting the financial years ending April 2004 and 2005.

Shortly after these came to light in August 2006, the group was forced to restate results relating to earlier years. A change in accounting policies meant £174m of revenues booked since 2003 had to be realised in future years instead.

The group, which had also been beset by delays to the National Programme for IT in the NHS, then revealed losses of £382.2m for 2005, after writing down the value of a major acquisition it made in 2004. This wiped out previously reported profits.

None of the men have any ongoing relationship with iSoft, which has since been sold twice, and recently became part of CSC’s healthcare group.

Co-founder and ex-chairman Cryne is also owner of Barnsley FC. He stepped down when the firm was valued at more than £1 billion, before the irregularities were identified.

Co-founder Graham also part-owns a golf club with Cryne, and was the company’s chief operating officer and commercial director before he left iSoft in August 2006.

Whiston is a qualified accountant and joined the company at the same time as the founders. He resigned as chief executive in June 2006.

Whelan is also a qualified accountant and had the smallest shareholding of the four before leaving in November 2004.

They each deny one count of conspiracy to make misleading statements promises or forecasts, contrary to the Financial Services and Markets Act 2000 and section 1 of the Criminal Law Act.

The case will be heard at Southwark Crown Court, where the men appeared yesterday for legal arguments ahead of the case. A jury is likely to be sworn in today.

Comments have been closed on this story to comply with the law on contempt of court. Comments will be re-opened when the trial has concluded.