RMJM boss 'could face three years in jail'

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RMJM chief executive Peter Morrison could face a jail term in Hong Kong and a hefty fine amid claims the architecture firm failed to pay staff wages in its Asia practice.

The office's principal architect Catherine Siu claimed she was one of a number of employees of the Edinburgh-headquartered firm to lodge an official complaint with the Hong Kong labour department over unpaid salaries.

Under Hong Kong law, if the company is prosecuted and found guilty of non-payment of wages, it could be fined up to 27,500 - and its directors could be sentenced to up to three years in prison.

In an e-mail tirade sent to all staff in the division, Ms Siu accused chief executive Mr Morrison - who until recently, employed former banker Sir Fred Goodwin as a consultant at the firm - of "stripping out all cash" from the division and leaving the Hong Kong office unable to make payments to workers and local creditors.

RMJM yesterday hit back, saying it has suspended Ms Siu amid an investigation into her "bizarre, irrational behaviour" - but admitted there was a "limited element of substance" to her e-mail. The company also claimed that Ms Siu, who has worked for the firm for seven years, intended to "destabilise" the business in Hong Kong.

About 80 workers are understood to have left the Hong Kong office over the past year amid claims of unpaid wages.

• RMJM: The highs and lows

Ms Siu said Mr Morrison, who runs the firm with his father, Sir Fraser Morrison, had utilised "preferential payments" to give the "illusion of creditworthiness", by handing out money due only to people who complain or threaten legal action.

"Please be advised that I have filed a complaint with the Hong Kong labour department regarding your decision not to honour your obligation to pay staff salaries in Hong Kong, in full and on time," she wrote, in a message addressed to Mr Morrison and copied to all workers in the Hong Kong office.

"Having received a private tutorial from a business adviser as renowned as Sir Fred Goodwin (especially in matters of financial distress), surely you are fully aware of your legal obligations under Hong Kong law and of your legal liability as a director of RMJM HK."

Ms Siu, who has worked on projects for clients including the Hong Kong and Chinese governments and the China Merchants Bank, claimed that the Hong Kong arm of the business, which was established in 1981, had brought in millions of dollars over the past year.

"Surely, when your father first bought this business for you, it came with a User's Manual of sorts.My guess is that one of the first lessons that would have been included is that an architectural practice requires working capital, that cash flow can be lumpy over the course of a year, and that trying to operate on a hand-to-mouth basis on a month-by-month time frame is utterly absurd."

Insiders have claimed that Ms Siu has raised the possibility of setting up her own rival architecture firm in Hong Kong.

Yesterday, Mr Morrison said: "There is a very limited element of substance to Catherine's e-mail, but these are the calculating, exaggerated writings of someone who, it is now clear, has been working against the interests of RMJM, our team, our partners and our clients.

"Her letter and behaviour are clearly designed to try to destabilise our operations in Hong Kong and her personal agenda will no doubt become clear in the near future."

He added that RMJM's funding was "normalising" after a series of "significant" new contract wins, pointing to the company's order book, which he said had risen to $125 million by the end of the year.

Declan Thompson, RMJM's group commercial director, admitted that salaries had been delayed over the Chinese New Year period, blaming slow payments from clients.

"I and the principals in Hong Kong are particularly disappointed by Catherine's bizarre, irrational behaviour and disingenuous e-mail," he added.

RMJM was unable to confirm whether all salaries in its Hong Kong office had been paid up to date.

RMJM's latest set of accounts, for the year to the end of April 2010, were due to be published in January - but have not yet been filed with Companies House.