The Guardian newspaper reported today that it will challenge a high court order made in 2004 which limits its reporting of accounting issues at British healthcare software firm iSoft Group Plc.

The news comes as a further blow to the software company at the heart of the £6.2bn NHS digitisation programme, with contracts to upgrade clinical IT systems covering 60% of the English NHS.

The Guardian said that in 2004 it had seen documents and spoken to sources that raised issues about iSoft’s accounts. It added that iSoft had denied any irregularities when approached and taken legal action to limit the newspaper’s reporting on the issue.

In a front page story this morning the paper gave notice that it intends to apply to have the gagging order removed “secured by iSoft in order to halt a Guardian investigation in 2004”.

On 8 August, iSoft said an initial investigation into possible accounting problems showed evidence of irregularities affecting its 2004 and 2005 financial years. ISoft’s suspended its commercial director Steve Graham, one of the firm’s founders. Other former staff were also said to be involved but were not named.

The provisional enquiry by accounting firm Deloitte has concluded that advance payments to iSoft were wrongly included in its accounts. Over the past year the company has been hit by a string of problems and profit warnings related to delivery delays in the NHS IT programme, already running two years late.

Earlier this year the Manchester-based software firm was forced to restate its profits for the financial years 2004 and 2005 because of a change in its accounting practice. This has meant that operating profit for 2005 was reduced from £72m to zero and revenues cut from £262m to £190m.

The software company must release twice-delayed financial results by Friday or risk having trading in its shares suspended.


Company at heart of NHS reform in serious trouble – The Guardian, 23.08.06