#24. When the burden of proof is on trial.


This is going to be a long one, so get comfortable, because the task in hand is to define what’s meant when someone says: “I’m innocent.” A sort of reality check.

Some of you may have seen recent media reports of the criminal complaint against Keith Barrow, former leader of Shropshire Council’s Conservative ruling party, having been “disregarded” by police. That was a strange word to use. One report mentioned me as the complainant. I wasn’t and I wrote to the Shropshire Star to say as much and the correction appeared in the 21st June edition.

Thanks to that word “disregarded” the reports were a tad misleading. The officer investigating the complaint, Det Insp Mark Glazzard actually said: “This investigation has concluded, and no further action will be taken into this matter.” In fact it was most definitely “regarded”, as made clear by DI Glazzard in his subsequent statement to the Shropshire Star (22 June 2016) defending the decision to investigate the complaint. The case was marked for no further action because of insufficient evidence.

The criminal complaint did arise out of my Code of Conduct complaint because it related to how information relating to transfers of ownership and dates had been misrepresented to the original investigation. So there was indeed a basis for a criminal complaint because there were grounds for reasonable suspicion that an offence had been committed. But there was insufficient evidence for a criminal investigation to be taken further.

I did advise against it because by the time the criminal investigation took place the earlier ‘civil’ investigation of my original complaint would have been completed. So what?

In a ‘civil’ case the burden of proof is based on the balance of probabilities, whereas in a criminal case the burden of proof means a case has to be proven beyond reasonable doubt. I argued that, even in the event of Keith Barrow being found guilty of a breach of Shropshire Council’s Code of Conduct, due to the lighter burden of proof the seriousness of the offence could be played down by a few disingenuous statements attributing the wrongdoing to “an oversight”, allowing guilt to slip conveniently to the back of some people’s minds. I wasn’t wrong!

It is a matter of public record that the independent solicitor appointed to investigate my complaint uncovered Keith Barrow’s wrongdoing only after gaining access to documents that had previously been held to be “commercially confidential” by Keith Barrow. As chairman of ip&e he was the person who had overall responsibility for the management of that company, in which role he had what is known as a ‘fiduciary duty’ of care to its shareholders, the taxpayers of Shropshire county, which is not just a duty of care but a duty to care, a duty which all directors of that company shared.

Fiduciary duty’ is a legal requirement of care that applies to any director of a company because they have agreed to accept legal ownership or control and management of an asset or group of assets belonging to someone else. In the case of ip&e that “someone else” was the taxpaying Shropshire public. Anyone in a senior management position should know this because it is basic textbook stuff.

A fiduciary duty is one of complete trust. From the outset, it was always my contention that that trust was immediately placed in jeopardy when Oswestry company DRE appeared amongst the names of accounting companies presented to Tom Roehricht, ip&e’s first Managing Director, as candidates for the position of independent auditor.

In his statement to the investigating solicitor, Tom Roehricht stated that Keith Barrow had made his connection with DRE known. Contrary to what all the parties to the selection of auditors maintained, that was not a mitigating factor because the inclusion of DRE in the list of candidates went against the guidelines of the Auditing Practices Board of the Financial Reporting Council, BECAUSE that connection was known, an inconvenient fact that was worked around by Mr Roehricht accepting the assurances of DRE’s directors that ip&e’s business would be dealt with by an office that did not handle Keith Barrow’s personal accounts. To borrow a favourite phrase of Private Eye: That’s alright then.

Those involved in the selection of auditors needed to look no further than the ‘Introduction’ to APB Ethical Standard 1 (REVISED): Integrity, Objectivity and Independence where, in the section headed ‘Integrity’, paragraph 8 states:

Integrity requires that the auditor is not affected, and is not seen to be affected, by conflicts of interest. Conflicts of interest may arise from personal, financial, business, employment, and other relationships which the audit engagement team, the audit firm or its partners or staff have with the audited entity and its connected parties.

And paragraph 11:

The need for auditors to be objective arises from the fact that many of the important issues involved in the preparation of financial statements do not relate to questions of fact but rather to questions of judgement.

The primary moral and ethical responsibility of company directors is to acknowledge their fiduciary duty of care by avoiding even potential – and especially perceived – conflicts of interest, performing their functions with the highest level of competence and thoroughness in accordance with industry standards. What part of that lot did “they” have a problem getting their heads around?

In the matter of the appointment of ip&e’s independent auditors I didn’t think they had acted “with the highest level of competence and thoroughness in accordance with industry standards” and wanted an answer.

The final report of the investigating solicitor says this…

From the evidence produced to me it appears to be the case that there is an amount of disquiet and concern amongst a (vocal but probably relatively small in relation to the population of Shropshire) number of Shropshire residents about the activities of ip&e. Some members of the Council are also concerned, and the complainant, Cllr Tremellen published an article and a letter in the Shropshire Star referring to his concerns about ip&e. He was subsequently contacted by Mr Len Evans, who provided him with some views about ip&e, Cllr Barrow and a company, Peakfast Limited.

The allegation which came from this, which ultimately led to the complaint I was asked to investigate, was that Cllr Barrow and one of the directors of DRE & Co were linked due to a personal relationship, and from that the suspicion that DRE & Co were the accountants appointed by means of the influence of Cllr Barrow. One, both Cllr Barrow and Tony Matthews, a director of DRE & Co were also shareholders and directors of the company Peakfast Ltd. It was these circumstances that surrounded the complaint made by Cllr Tremellen which I have investigated.

The subsequent revelations about the failure to declare a pecuniary interest took me by surprise because I never, at any time, thought Barrow or any of the other directors involved would be stupid enough not to declare a pecuniary interest at what I had always presumed to be formal early meetings to establish ip&e, nor did I imagine that any of the senior council officers involved in those early dealings of ip&e would allow such an “oversight” to pass without comment. As far as I was concerned, everyone involved knew of the pecuniary interests, therefore it was the breach of APB guidelines that concerned me.

I put this question to investigating solicitor Olwen Dutton:

Why, given the fact that everyone knew there was a relationship between Barrow and DRE, did the appointment go ahead?”

Barrow himself gave the answer in his statement to the inquiry: To promote and support local Shropshire businesses.

The fact that the relationship was an active partnership with Tony Mathews, a principle partner in DRE, that went against every guideline in the book governing the appointment of auditors was obviously of little significance to Keith Barrow,

Whether the full extent of that partnership was known to Tom Roehricht is not known. Certainly, the full extent of it never became general knowledge until Keith Barrow admitted in his statement to Olwen Dutton the full extent of his partnership with Mathews in ‘Peakfast’, a company that he originally said was “dormant”, but which actually owned a ransom strip controlling one of the accesses to a building development in Morda on the outskirts of Oswestry.

[Note: The devil was in the dates relating to the changes of ownership of that ransom strip that was at the centre of the criminal investigation because, far from being dormant the partnership of Peakfast was very much alive and potentially very valuable. The question for the criminal investigation was whether there was any intention to mislead in the statements given to the ‘civil’ investigation. No evidence, apparently. Any activity relating to the transfer of ownership of Peakfast just a few days after the date of my formal Code of Conduct Complaint being submitted was entirely coincidental.]

When I submitted my Code of Conduct complaint, it was my belief that it was lax management, absence of directorial discipline, and arrogance compounded by sheer stupidity that led to the “unfortunate oversight” that was Keith Barrow’s failure to declare a pecuniary interest at what I had assumed to be formal meetings of the ip&e board. It turns out that most of those early meetings were anything but formal.

Given all of the above, Keith Barrow’s reaction to being told that the criminal investigation into his actions whilst chairman of ip&e had been “disregarded” comes as no surprise because he appears to be still blissfully ignorant of what was expected of him as chairman of a major company.

So why was I so concerned way back in July 2015? Well, to tell the truth, I was concerned way before that, in fact my “disquiet” over ip&e had been present from day one, but it had to do with the “business model”. When I first read about Keith Barrow’s ambitions for ip&e it was like going back in time to my business analysis days.

I was awarded my business degree when I was 51 years of age. The degree included Financial and Management Accounting and Business and Company Law. That didn’t qualify me as either an accountant or lawyer but did give me an awareness of ethical business standards.

There followed two and a half years research into objective methods of assessing the performance of both small and medium-sized businesses. Working as a freelance I did research assessing grant applications for Department of Trade and Industry (DTI) business support in the form of funding distributed through Business Links and Chambers of Commerce. Company executive officers were interviewed on the market position and financial situation of their company, with an undisclosed secondary agenda designed to assess the skills, knowledge, and awareness of the market they operated in. I was tasked with looking at the extent of their knowledge about the competition they faced (market intelligence) and their capacity and willingness to apply any lessons learnt from that exercise. The DTI was not about to hand out significant chunks of money to keep a lame duck swimming against the tide.

My Code of Conduct complaint opened a few curtains on ip&e’s modus operandi, certainly that of its chairman and directors. “Relaxed” wouldn’t be far off the mark to describe operational procedures. I would have advised the DTI to run a mile.

Keith Barrow’s decision to move ip&e’s operations to a unit on a Shrewsbury business park away from Shirehall didn’t just distance the company and its operational management from Shirehall, it also distanced ip&e from the scrutiny of Shirehall and the officers charged with ensuring that ethical standards are not only established but maintained within the Authority.

Given all of the above, my eyebrows shot up when I read the statement issued by Keith Barrow’s solicitor following the “disregarding” of the criminal complaint against him.

The outcome while unsurprising is obviously welcomed. On behalf of Mr Barrow, we can confirm that he has always denied any inappropriate conduct, and has remained silent, despite the significant delays in clearing his name, social media innuendo and comment while the police investigation was completed.

The decision to say nothing until this matter was concluded was to ensure that the police inquiry could focus on collecting the evidence which would exonerate him without any misunderstanding or misinterpretation. The legal obligation to investigate such complaints, irrespective of their obvious lack of merit, does require a review and amending.”

It requires neither. The only thing that requires “ review and amending” is Keith Barrow’s take on what he did and the consequences of his actions on Shropshire Council and the taxpayers whose interests he disregarded.

Keith Barrow remains characteristically defiant.

As a postscript, on the Friday morning that it was announced that Keith Barrow had stepped down from Shropshire Council I was in a meeting at Shirehall so both my phones were switched off.

When I got back to my car I switched my phones on. In the hour it took to get home I’d had four phone calls (taken on the hands-free) from people I didn’t know, all thanking me for that morning’s news.

When I got home, the phone was pinging all evening. My wife got so fed up with it that she told me to switch it off.

I was genuinely shocked by some of those phone calls from staff and members of the public because I had no idea of the back-stories behind what I had done because at no time had any of it been “personal”.

Only since I’ve heard those back-stories has it become personal!