Deloitte & Touche Partner Comments about SHAC Harassment Campaign

The Financial Times (UK) had a brief item in July reporting on Deloitte & Touche speaking out about the harassment it faced as Huntingdon Life Sciences’ auditor.

The Financial Times reported that Deloitte & Touche senior partner John Connolly cited both safety concerns for its staff as well as issues of increased security costs for the company’s decision to end its relationship with Huntingdon Life Sciences. Deloitte & Touche had been HLS’ auditor.

The Financial Times quoted Connolly as saying,

We did not like to walk away from any client in circumstances of intimidation. I cannot recall us ever doing it. But we had to protect our people.

In response to a question about whether the UK government could do more to stop extremists such as Stop Huntingdon Animal Cruelty from carrying out such campaigns of harassment, Connolly said, “Yes, . . . You might think more could be done to stop the organizations operating.”

Source:

Former Huntingdon Auditor Says Government Should Do More to Protection Businesses. Andrew Parker, Financial Times (UK), July 10, 2003.

Huntingdon Life Sciences Weighs Audit Options

In the wake of Deloitte & Touche’s decision to withdraw as auditor for Huntingdon Life Sciences, the company is weighing how best to comply with legal requirements for auditing while at the same time sparing auditing companies from harassment by animal rights extremists.

Accountancy Age reports that one solution it is considering would be to hire a firm to audit the company for a single year only. Accountancy Age quotes a spokesman for the company as saying,

From a legislative point of view, we don’t necessarily have to make public who is working on our audit until after the work is completed. That firm may not actually be working for us by the time the information is published

One would assume, however, that Stop Huntingdon Animal Cruelty would simply refocus its campaign in that case on punishing the previous year’s auditors in order to deter future auditors from wanting to take on HLS’ accounts.

HLS could potentially lose its OTC stock listing in the United States if it is unable to find an auditor.

Source:

HLS seeks hit-and-run audit results. Paul Grant, Accountancy Age, April 24, 2003.

The Evening Standard Profiles Brian Cass

The Evening Standard’s Michael Pilgrim wrote an interesting profile of Huntingdon Life Science’s that outlined both Cass’ willingness to stand up to the intimidation from animal rights activists as well as the increasingly limited ability that groups such as Stop Huntingdon Animal Cruelty have had in actually harming HLS economically.

Although SHAC’s campaign is, if anything, stronger than ever, Huntingdon’s bottom line continues to improve. The company recently reported that the value of is orders have doubled over the last five years to just shy of Pounds 100 million. In 2002, HLS’ net income was Pounds 1.7 million compared to a loss in 2001 of Pounds 6.1 million.

Despite SHAC’s never ending claim that now HLS is really teetering on the brink of insolvency and despite SHAC’s terrorist-like tactics against the testing company, HLS seems to have regrouped and now has an effective strategy to go forward even in the very hostile environment that SHAC and others have created.

Cass told Pilgrim,

These guys are not going to screw up my life. I am just going to live as I want and they are not going to impinge on that.

. . .

I am not closed or secretive. I’ve always believed in openness. For too long people have put up walls and said we don’t need to communicate. Organisations like this used to say, ‘We just need bigger fences.’

Frankly such a view is refreshing, given how many companies have folded rather quickly in the face of a SHAC’s campaigns of harassment. Certainly one cannot blame a company like Deloitte & Touche for not wanting to put its employees at ground zero of a campaign of threats and harassment by animal rights activists, but at the same time it’s good to see somebody standing up even after a violent physical assault on his person and say that he will remain unbowed in the face of such terrorist acts.

Source:

Behind the razor wire with the man from Huntingdon. Michael Pilgrim, The Evening Standard (London), March 31, 2003.

Is HLS at Risk of Being Delisted?

Accountancy Age carried a brief story in late March about one of the possible implications of Deloitte & Touche’s decision to sever ties with the animal testing firm — if it can’t find another accounting firm willing to take on its account, it could risk being delisted.

Deloitte & Touche caved into Stop Huntingdon Animal Cruelty extremists after just 10 days of harassment from animal rights activists. Are other big auditors going to want to take on that burden?

According to Accountancy Age,

. . . the Securities and Exchange Commission has said that if a company fails to file audited reports within the allotted time-scale, it would face being delisted from the stock exchange. ‘Cases are handled on an individual basis and extensions can be offered, but all reports filed with the SEC have to be audited,’ said John Nester, SEC Spokesman. He added that one a company is delisted, it no longer has to file its reports.

One would assume that the SEC would take the special circumstances into account here, but for how long?

Source:

HLS risks delisting in the US. Larry Schlesinger, AccountancyAge.Com, March 20, 2003.

Deloitte & Touch Drop Huntingdon Life Sciences

Huntingdon Life Sciences announced at the end of February that its auditor, Deloitte & Touche,

. . . will not stand for reelection following completion of the 2002 audit. D&T has advised LSR [Huntingdon] that their decision was made as a result of harassment they received from animal rights extremists and not as a result of any accounting dispute, disagreement or concern with LSR.

Stop Huntingdon Animal Cruelty quickly took credit for Deloitte & Touche’s decision, posting on the SHAC web site,

This evening, as late as they possibly could, in a pathetic attempt to avoid the press, Deloitte & Touche have waved the white flag and surrendered to SHAC.

. . .

There has never been a response to a target like this one — we were swamped with phone calls and emails all day long as activists went to war against Deloitte & Touche. Offices were picketed, home demo’s were carried out on directors, locks were glued, offices and homes were spray painted. There was leafleting, there were mass phone calls, there were mass e-mails, there were actions taking place all over he world daily. Most of all there was relentless drive and determination of all of you to drive SHAC’s message home: sever your links with HLS or face the consequences.

The Financial Times quoted an unnamed Deloitte & Touche employee as saying, “There has been criminal damage, windows broken, doors glued shut, and intimidation of wives and young children of several staff.”

Unfortunately running away might not solve the problem. SHAC’s Greg Avery told AcountancyAge.Com that the animal rights group would likely continue to target Deloitte & Touche,

If the latest annual report comes out of HLS with Deloitte’s name on it [as auditor] then we will still consider them to be the company’s auditors.

HLS meanwhile appealed for the British government to follow through on promises of cracking down on such extremism. In a statement the company said,

This is yet another example of how the law and order systems of this country are unable to protect individuals and companies from the illegal acts that inevitably now accompany animal rights protests. How long can the British government allow this extortion to continue?

How long indeed.

Sources:

Amazing! Deloitte & Touche pull out after only 10 days. Stop Huntingdon Animal Cruelty, March 2003.

Form 8-K Current Report. Life Sciences Research, February 28, 2003.

Deloitte quits as auditor of drug-testing group. Patrick Jenkins, Financial Times, March 1, 2003.

Deloitte severs ties with HLS. Paul Grant, AccountancyAge.Com, February 2, 2003.

Arrest as protesters target HLS auditor. Cambridge News, February 27, 2003.

SHAC Targeting HLS Customers in the UK

Scottish newspaper The Herald recently reported on a dossier it received which listed more than 100 UK customers of Huntingdon Life Sciences which Stop Huntingdon Animal Cruelty apparently plans to target in the next phase of its campaign against the firm.

The dossier contains the list along with advice from SHAC on how to go after the firms. The Herald quotes from the dossier,

The sky really is the limit in how you target customers . . . The message to these customers is simple: sever your links with HLS, make a statement to that effect and we will back off. Simple. . . . HLS is a disgusting, criminal hell-hole and the people who deal with them should be viewed in the same way.

In an accompanying editorial, The Herald had a well-written denunciation of SHAC and what it stands for,

It has brought HLS to the brink before by employing terrorist tactics to frighten off firms doing business with the research company. Deloitte and Touche, the accountancy firm, is the latest to abandon HLS after the homes of its directors were targeted by animal activists.

Flushed with success, the Shac group has apparently drawn up a new list of more than 100 British customers of HLS that could come in for similar treatment. They include six Scottish businesses. Organon, which has drug-testing laboratories in Lanarkshire, is one. Hans De Ridder, its director of research, described the Shac as “a violent action group”. Being on the list was not something the company appreciated, he said; quite an understatement, given the group’s behaviour to date. It is understandable when businesses decide enough is enough after their employees (including eminent scientists) are threatened and have their homes vandalised by animal rights groups. But it serves neither scientific progress nor democratic values well to give in to thuggish actions.

Now if only the UK government would display the same sort of backbone.

Sources:

Animal rights group’s new targets include Scots firms. Martin Williams, The Herald (Scotland), March 4, 2003.