UK accounting watchdog chief resigns to head rail project

LONDON (Reuters) - The chief executive of Britain's accounting watchdog, Jon Thompson, will leave the organisation later this year to become chair of the country's HS2 high-speed rail project.

Thompson, who has spent nearly two decades in government roles with financial oversight, was seen as an experienced hand at the Financial Reporting Council (FRC), which is slated to undergo a transition into a new, more powerful regulator.

British lawmakers criticised the FRC as toothless after accounting scandals at retailer BHS and builder Carillion, prompting government-backed reviews which recommended creating the Audit, Reporting and Governance Authority (ARGA), which Thompson was expected to head.

The government however has yet to put forward legislation to set it up.

"While I am disappointed Jon is leaving us, I have enjoyed working with him and look forward to his continued leadership of the organisation over the next six months," FRC Chair Jan du Plessis said in a statement.

The FRC, under Thompson's leadership, has become a "modern, fit for purpose regulator... ready for its new powers and responsibilities when ARGA is established," du Plessis added.

Sarah Rapson, the FRC's executive director for supervision, was appointed as deputy CEO on an interim basis.

At HS2, touted by the government as the largest infrastructure project in Europe, Thompson will lead a controversial undertaking that has faced spiralling costs and been forced to scale back a planned link as a result.

The project, which will connect London to Manchester in northern England, is scheduled for final completion from 2035-2040.

Thompson, who has been serving as deputy chair at HS2 for almost a year, said he was "delighted" at his appointment as its chair.

(Reporting by Sachin Ravikumar and Huw Jones; Editing by Jan Harvey)