Sanctuary Dumps Taylor

Sanctuary has dumped company founder and chief exec Andy Taylor following a May 25th board meeting headed by former British Airways boss Bob Ayling.

Sanctuary said in a May 26th statement that Taylor had been “removed” as a director and that the decision followed the new board’s conclusion that “certain of the prior year adjustments made in the 2005 accounts should have been presented as a correction of fundamental errors and not as changes in accounting policy.”

Following information revealed by The Daily Telegraph, the Financial Services Authority (FSA) – the City regulator – is looking into the circumstances surrounding Sanctuary Group’s £110 million (US$206 million) share-placing in March.

The paper claims Taylor, who was still chairman and chief exec, should have given the investors who stumped up for the rescue fund-raising more information about a letter the company received from the Financial Reporting Review Panel on March 7th.

The FRRP, which is as a subsidiary of the Financial Reporting Council, was set up in 1990 to ensure that the information provided by public and large private companies complies with the relevant accounting laws.

The Sanctuary board took the letter seriously enough to call in company auditors KPMG to investigate its possible repercussions.

But, according to The Telegraph, Sanctuary should also have let would-be investors know more about the exact nature of the letter and given more detail on the company’s response to it.

It seems that omission has now cost Taylor his job. He had already stood down as chairman to make way for Ayling, but his role as chief exec, which he was due to continue, has now been given to Frank Presland, chief executive of Sanctuary’s Twenty-First Artists, albeit on a temporary basis.

The 62-year-old former music business lawyer whose company represents Sir Elton John and James Blunt will stay in the post until Sanctuary reviews the situation at the end of 2006.

Media reports have suggested Taylor may set up on his own and even take one or two acts with him, although he’s likely to be bound by some sort of non-compete agreement.

He’s on a one-year contract that earned him £391,000 (US$733,000) last year and is expected to remain on “gardening leave” until his current agreement expires.

– John Gammon