Crozier is asked about historic issues relating to how the Post Office ended up signing a contract with Fujitsu for the Horizon software.

Inquiry lawyer Beer describes the process as a "rather traumatic birth" which attracted controversy. It included a set of failed negotiations and dissent from some Post Office employees who thought the software and provider lacked credibility.

Crozier says the only controversy he was aware of from the years before he took over at Royal Mail related to the payment of benefits via the Post Office - an "existential" issue for the company in financial terms - but did not know the Horizon backstory and wasn't made aware.

Crozier says by the time he took over, Horizon was well established and "as far as I was aware" it was working well.

Stay with us as we catch you up with a few more lines while the inquiry is taking a quick break.

Asked about the style of management of Royal Mail, Crozier says the style was "to go looking for problems" and to fix things across the business.

He says it is a "huge regret" they were not aware of the issues at the Post Office.

He confirms the board sought out problematic areas - but this one was not found and escalated to the board.

He is asked what threshold would have needed to be crossed in order for an issue to be escalated to him.

He says something that would impact the company financially or reputationally.

James Gregory
Reporting from the inquiry

An interesting moment in the inquiry as Adam Crozier, the former CEO of Royal Mail, is asked directly about the competence of the man we heard from earlier today, Alan Cook - the head of the Post Office between 2006 and 2010.

Inquiry lawyer Jason Beer KC asks Crozier whether Cook was out of touch with the business he was running by not knowing that sub-postmasters were being prosecuted by the Post Office and going to prison.

Crozier says Cook gave the impression of "someone in control of his brief", adding that he finds it surprising Cook did not know of the prosecutorial role the Post Office had in 2009.

Inquiry lawyer Beer asks about the "real difference" in the culture of the Post Office compared to the Royal Mail.

Crozier says that the Post Office always thought of themselves as a different organisation - "the public service, the face of government".

He says there was a "difference in outlook, difference in the objectives of the two companies" - which he says made sense - exacerbated by the feeling that each was a different entity.

Beer cites evidence from earlier in the inquiry that concerns over Horizon were not raised because Post Office employees thought raising such issues may damage their career. Were you aware of that? he asks Crozier.

"I'm very sorry to hear that," replies the ex-Royal Mail CEO, and says he had encouraged openness in his company.

But he adds that there was more than one route to report such issues, and says it was possible to reveal such information anonymously if the people were really concerned.

Image source, Post Office Inquiry

Crozier says he has "real regret" that the Royal Mail was structured in a way on his watch that meant he and other senior board members weren't made aware of the large number of prosecutions being launched by the Post Office.

Inquiry lawyer Beer puts it to him that it was Royal Mail's responsibility to ensure those structures were in place.

Crozier acknowledges that the needed checks and balances "failed to surface this issue to a wider set of people".

We're now getting into the sharing of information between Royal Mail and the Post Office on the conduct of its prosecutions.

Crozier tells the inquiry that the structure of the Post Office Group meant that certain things were allowed to fall through "the cracks".

He adds that the level of his awareness of the prosecutions - "due to lack of communication from the Post Office - was probably very low".

Asked who was responsible for this, Crozier replies - after a long pause - "I think you'd have to say with the Post Office CEO and chairman".

"Do you remember receiving reports about the conduct of prosecutions by Royal Mail lawyers on behalf of the Post Office?" Beer asks Crozier.

"No I don't," says Crozier.

Should their conduct have been supervised? Beer asks.

"With the benefit of hindsight, yes", replies Crozier.

Now we’re looking at a document from May 2004, which shows the minutes of Royal Mail's audit and risk committee, which Crozier attended.

Again, the document refers to hundreds of prosecutions taking place in the last year - but Crozier says for a second time in his evidence that those notes must refer only to Royal Mail-related cases.

Beer asks why it was the case that only Royal Mail cases were being referred up to the board and not those involving the Post Office.

Crozier says he doesn’t know why that was but says those meetings came at a time when Royal Mail was encountering a high rate of fraud among its staff, such as bank card theft, which drew a lot of focus.

Inquiry lawyer Beer presses the ex-Royal Mail CEO on what special supervision and oversight was required of the Post Office for the prosecution of its employees.

Crozier says he believes there would have been supervision of legal advice, general counsel, audit personnel and the company secretary.

Asked about the separation of these functions, Crozier says legal processes are not his area of expertise.

Pressed again on the workings of these functions - including for the recruitment of personnel - he says he assumes all the people were qualified.

Beer puts it to Crozier that the "truth of matter" is that he "did not have any understanding of the to extent to which the PO was prosecuting, or the extent to which they were or were not carried into affect".

Crozier says he's "not a laywer", adding again that he would not claim it was his area of expertise.

James Gregory
Reporting from the inquiry

I said earlier that a key theme of Alan Cook's testimony - which we heard earlier today - was the claim he couldn't recall some of the meetings, documents and emails from his tenure at the Post Office, which have been mentioned in this inquiry - and it seems this is also a theme of Adam Crozier's evidence.

It was a long time ago - Cook and Crozier left the Post Office and Royal Mail respectively in 2010 - so it is perhaps reasonable that their recollection of some of the specific details they are being asked about is a bit hazy.

For the falsely accused sub-postmasters and sub-postmistresses though, their ordeals will still only feel like yesterday.

The Inquiry counsel continues questioning Crozier about the Royal Mail's prosecutorial activities.

He asks Crozier whether he would have received regular updates about the investigations into wrongdoing by Royal Mail employees, such as how many were prosecuted each year, how much the company had lost, and what amount was recovered.

"I'm not sure I'd use the word 'regular'," replies Crozier, but he confirms he received updates on the prosecutions and ongoing investigations - which especially came to the fore around the time of a Channel 4 programme, which highlighted malpractice within the Royal Mail.

Crozier also agrees that it is unusual for a company to prosecute its own staff. But he elaborates that the Royal Mail's prosecutions seemed "more straightforward in terms of theft, or various other things" and they were done alongside the police and the other relevant authorities.

Image source, Post Office Inquiry

Inquiry lawyer Beer is methodically going through sections of Crozier’s witness statement, where he says he had no knowledge of court cases initiated by the Post Office.

In his statement, he writes: “I do not recall having involvement in or knowledge of the oversight of the investigations and prosecutions”.

He is shown an internal document which states more than 300 people were prosecuted by the Royal Mail in 2002/03.

It is put to Crozier that by this point it should have been clear that the Post Office was engaged in a large number of prosecutions.

But Crozier says he believed that figure was referring to Royal Mail staff, not to sub-postmasters working for the Post Office.

Beer now asks about the different levels of responsibility had by board members over various parts of the group.

He rattles through a who's who of Post Office and Royal Mail executives.

But Beer's focus is on oversight of criminal proceedings and prosecutions within the group.

He asks Crozier if he was aware that the Post Office had no separate in-house legal team and that proceedings were brought instead by members of the Royal Mail legal team.

"No," Crozier replies.

Pressed to confirm that he wasn't aware that throughout his term of employment this was the arrangement, Crozier repeats: "I was not aware of that, no."

Image source, Post Office Inquiry

Inquiry lawyer Jason Beer KC asks former Post Office CEO Adam Crozier about bookkeeping issues in the Post Office.

He asks Crozier whether a director or CEO's duties would have included keeping track of the accuracy of accounting information and accounting records.

"Yes it would," he replies.

Would you, as the CEO, expect any allegations or issues about accounting integrity to be escalated to you and the main board? Beer asks.

"Yes," replies Crozier, and elaborates that the external or internal audit team would be expected to report any issues that arose regarding the Post Office's books to be raised with the board and the audit committee.

We've been hearing about the unexplained shortfalls sub-postmasters and mistresses were experiencing - but what actually went wrong with the Horizon IT system?

It's the responsibility of those running Post Office branches to balance their accounts, which had previously been done on paper, but in 1999, Fujitsu's Horizon was introduced.

Almost immediately there was an increase in the number of staff experiencing accounting shortfalls which they could not explain.

Josephine Hamilton, a former sub-postmistress from South Warnborough, who was convicted of fraud, says she saw the amount "double before her eyes" while using the software.

Hamilton said at first the Horizon system showed there was £2,000 missing.

She then contacted the Post Office support, who advised her, but after following their instructions, the amount doubled to £4,000.

Many reported that the Horizon system made it look like money was missing when it wasn't.

Jason Coyne, an IT expert, was instructed to examine the computer system in 2003 and reported "concerning discrepancies".

Coyne said there "was clearly defective elements of its hardware, software and interfaces, and the majority of errors noticed in the fault logs could not be attributed to the sub-postmaster".

Coyne said the Post Office data was "unreliable" but he was ignored, sacked, and then discredited.

This afternoon's session of the Post Office inquiry is back.

You can watch all the latest from Aldwych House by pressing Play at the top of the page.

Here's a heated moment from this morning's inquiry when Post Office former managing director Alan Cook was asked about the imprisonment of Janet Skinner in 2007.

As we reported earlier, Skinner believes Cook should have been "well aware" of what was going on when the Post Office was prosecuting sub-postmasters and mistresses.

Azadeh Moshiri
Reporting from outside the inquiry

I’ve caught-up with Christopher Head who was only 18 years old when he started running a Post Office in West Boldon, South Tyneside. That was 2006, the same year Alan Cook became managing director of the Post Office.

He tells me Cook’s response to concerns around the Horizon system in 2009 is a “complete disgrace”.

In an email shown to the inquiry, Cook wrote, “subbies with their hand in the till choose to blame the technology when they are found to be short of cash".

Alan Cook has said it’s an "expression I'll regret for the rest of my life".

Chris argues despite Cook telling the inquiry he didn't realise the Post Office had initiated the prosecutions during much of his time as managing director, “he automatically jumped to this conclusion”.

He says, "to say that he was a hands-on boss yet didn't ask very many questions or have any idea what was going on around it is just unbelievable".

Chris’ shortfalls rose to the tens of thousands. He was eventually suspended in 2015 and wrongly accused of theft and fraud.

Here at the inquiry, it’s hard to get over the irony. Cook told the inquiry that during his tenure, he felt "the sub-postmaster community felt unloved" and that he tried to "get close" to branch managers.

Speaking to Chris and other victims, it’s clear those efforts clearly fell short – and that’s putting it mildly.

Just before the inquiry broke for lunch, it was looking at minutes from a Post Office meeting attended by Adam Crozier.

Jason Beer KC asks about his concerns for the financial viability and existence of the Post Office, to which Crozier says it didn't just impact the solvency of the Post Office, but of the group as a whole.

He then asks Crozier if he was attending the meeting because it was addressing the impacts on the Royal Mail group as a whole.

"Indeed," Crozier replies.