A senior executive of an IT firm accused of misleading investors over a £44.3 million contract told a court “everyone” knew a key document had not been signed.
Stephen Graham, 48, director of operations of iSoft Group, allegedly plotted with Barnsley FC owner Patrick Cryne, 61, Timothy Whiston, 44, and John Whelan, 45, to make millions by deceiving the stock market.
They allegedly used a forged contract to claim cash projected revenues from a 54.3 million euros – £44.4 million – deal with the Irish health service, Southwark Crown Court heard.
The revenues were recognised in the company’s accounts from as early as October 2003, despite the contract not being signed until April 2005.
In 2006 the company called in the Financial Services Authority after its own investigations found evidence of irregularities, forcing iSoft, which was worth £1 billion at its stock market peak, to restate its accounts by £174 million and led to the resignation of several of its key executives.
The company was founded by well known Birmingham businessman Roger Dickens who had already stood down as chairman of the company as he fought a losing battle against a lengthy illness.
He died in January 2006.
“Everyone knew it was not signed, as far as I was aware,” Mr Graham told jurors.
Mr Graham also claims not to be the author of an e-mail sent to Ireland in July of the same year which denied the revenues had been recognised.
Prosecutor Richard Latham QC asked: “You did not send an email that went out from your computer to Ireland saying you have not recognised any revenue?”
Mr Graham replied: “I did not.”
Later in his evidence, it emerged the message – sent from his account at 4.30pm on July 23 – was full of spelling mistakes, in contrast to all of the other e-mails he sent that day.
The court also heard that a further e-mail sent from the account at 5.02pm – which Graham agrees he sent - made no reference to the earlier message.
Had the firm not signed the deal with Ireland it stood to make a loss of more than £10 million, the court has heard.
Mr Graham and Mr Cryne became multi-millionaires as a result of the deception and the following sale of their shares in the business, it has been claimed.
The defendants deny 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.
Mr Cryne, of The Tannery, Town Lane, Charlesworth, Glossop, Derbyshire, is not appearing before the court due to health reasons.
The trial continues.