In a surprise announcement, Sanctuary Group's board has sacked CEO Andy Taylor over the way he handled the company's financial accounts.

In a surprise announcement, Sanctuary Group's board has sacked CEO Andy Taylor over the way he handled the company's financial accounts.

In a statement issued today (May 26), London-based Sanctuary's board said the decision to "remove" Taylor came after an investigation into its 2005 financial statement found mistakes had been made.

His role will be filled until the end of 2006 by Frank Presland, CEO of Twenty-First Artists Management, after which time the position will be reviewed. Twenty-First Artists Management, which represents Elton John and James Blunt, among others, was acquired by Sanctuary in 2005 for £16 million ($30.1 million).

The independent music company's board moved to replace Taylor after concluding "that certain of the prior year adjustments made in the 2005 accounts should have been presented as a correction of fundamental errors and not as changes in accounting policy."

The review was prompted after queries from the Financial Reporting Review Panel, which analyses company accounts for compliance with the law and accounting standards.

Taylor, who had presided over damaging losses at the company in recent years, had switched role earlier this year from chairman to CEO. At the same time, former British Airways chief executive Bob Ayling was hired as non-executive chairman.

In a statement, Ayling described Presland as "a hugely experienced and respected industry figure who knows the group well." Presland, he added, will "help drive the business to deliver appropriate levels of performance."

On joining the company, Ayling had declared his mantra would be to "ensure proper standards of corporate governance and financial transparency" in light of the financial problems that nearly crippled the firm.

Sanctuary's losses for its full-year 2005 fiscal period in soared to £142.6 million ($266 million) from £26.7 million ($49.89 million) a year earlier. Revenue fell to £156 million ($277 million) against £167 million ($297 million). The disastrous results were partly blamed on Sanctuary's Urban Records Group, which it has since shuttered.

Earlier this year, Sanctuary unveiled a £110 million ($205 million) rescue deal.

Taylor founded Sanctuary as an artist management company in 1976 with business partner Rod Smallwood, with whom he managed metal act Iron Maiden. Through acquisitions and organic growth, the company developed a 360-degree business model with interests in artist management, recorded music, music publishing, visual entertainment and merchandising. Smallwood is currently chairman of Sanctuary Artist Management Worldwide.

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