Alert over new fraud scandals

BRITAIN could be on the verge of uncovering many more serious cases of fraud because of the slowdown in economic growth and near recession, a former head of the Serious Fraud Office warned today.

George Staple, now head of the influential Fraud Advisory Panel, said: 'The climate of indifference to fraud in so much of Britain's business suggests the need for change in cultural attitudes.'

He said the scandals of a decade ago, including Guinness, Barlow Clowes, Blue Arrow, Maxwell and BCCI, 'were very much the result of the boom years of the late Eighties coming to an end'.

He added: 'These inevitably led to more insolvencies, which always reveal a level of financial malpractice covered up in more favourable times.

It is a disturbing fact that, now as then, most cases involve senior management, their purpose often being to disguise losses or to manipulate share prices.'

Mr Staple said that Britain had more well-developed rules for corporate governance and financial reporting than the US. But he warned that these had been put in place only after a 'period of complacency'.

It is estimated that fraud probably cost the UK £16 billion last year - £650 a year for every household.

According to accountants KPMG, 35 cases of fraud were prosecuted in Britain in the first six months of the year, more than in the whole of 2000 or 2001.