01 June 1998

THE NEW OWNER of National Car Parks, Green Flag and RAC Motoring Services, Cendant Corporation of the USA, has plunged deeper into the warm and smelly with its confession that half last year's claimed profits for the CUC marketing services operation – from which Cendant was created when it merged with fellow US company HFS - are attributable to fraud. Cendant chief executive Henry Silverman described CUC's accounting improprieties as 'a fraud of historic proportions', conceding that the extent of the scam is more than double the original estimate in April when the problem was first admitted. Responsibility for the fraud is hotly disputed with Silverman's finger pointing straight at Cendant chairman Walter Forbes (ex-CUC), whose own index digit indicates Silverman (ex-HFS). Each has hired separate legal advisors and the 28-member board is said to be split straight down the middle between former employees of HFS and CUC. The voracious predator is also in the thick of a $3.1bn takeover of Miami-based American Bankers Insurance which, Silverman insists, Cendant will complete, claiming that its underlying financial health is fundamentally sound.