CFO did not have right skills, claims jewellers

A jewellery shop on Dublin’s Grafton Street says accountancy firm Grant Thornton appointed someone who did not have the necessary skills to act as the jewellers’ chief financial officer, the High Court has heard.

Paul Sheeran Jewellers (Johnson’s Court) Ltd is suing Grant Thornton for negligence, breach of contract, and misrepresentation over the accountants’ choice of its own employees to work as chief financial officer (CFO) in the jewellery store.

Grant Thornton denies the claims and asked the High Court to order Sheeran to provide security for legal costs should the jewellers lose the case. The accountants estimated the cost to them of defending the case at €637,076 although this figure was disputed by Sheeran.

Grant Thornton sought the security order because, it claimed, Sheeran had substantial liabilities over assets and was substantially insolvent.

Sheeran denied this, saying that, after a debt restructuring, it is trading profitably and is wholly solvent.

Mr Justice Paul McDermott yesterday said he would not order Sheeran to provide security for costs.

While there may be a number of questions over the financial restructuring, and while the jewellers may face serious challenges as it emerges from the recession, he was not satisfied, as a matter of probability, that it would not be able to discharge an award of costs in the future.

Sheeran says that, in 2005, it engaged Grant Thornton to provide advisory services and carry out a number of reviews of the business.

One of the main recommendations from the review was for the recruitment of a CFO. Grant Thornton agreed to find a candidate but, Sheeran says, a successful candidate declined to accept the post and the accountants said one on their own employees would be suitable for the role.

Sheeran say the man chosen was incapable of carrying out the role as he did not have the necessary skills or expertise. Grant Thornton also failed to supervise the CFO in breach of an agreement that it would mentor him, it was claimed.