Campaign members will recall that the restatements of the Blancco accounts for year ending June 2016 and other accounting corrections led to a loss of over £135 million in shareholder value. The previous CEO exercised Stock Appreciation Rights prior to the disclosure of these restatements. ShareSoc referred these issues to the Financial Conduct Authority in January 2018 and, as far as the audit by KPMG was concerned to the Institute of Chartered Accountants for England & Wales (ICAEW) in February 2018.
ICAEW has at last issued its judgement – in April 2020, though they only advised us of it last week:
” KPMG LLP of London, United Kingdom
Consent order made on 2 April 2020
With the agreement of KPMG LLP of London, United Kingdom the Investigation Committee made an order that it be Reprimanded, fined £3,500 and pay costs of £2,743 in respect of the complaint that:
On 30 September 2016, KPMG LLP issued an audit report on the financial statements of “A” plc for the year ended 30 June 2016 which stated that the audit had been conducted in accordance with International Standards on Auditing (UK and Ireland) when the audit was not conducted in accordance with International Standard on Auditing (UK and Ireland)
230 ’Audit documentation’ in that the firm failed to prepare audit documentation that is sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the results of the audit procedures performed, and the audit evidence obtained in respect of certain deferred income.”
ShareSoc and UKSA jointly have written back to ICAEW registering strong criticism of a) the time taken to reach a decision, b) the derisory level of the fine relative to the damage caused, c) the scant information on the investigation and findings and d) the lack of transparency of the report which is buried among many other decisions with Blancco’s name anonymised. ICAEW has responded with a dead bat, saying that the investigation and reporting have respected their established procedures. ShareSoc directors plan to follow up this issue with senior ICAEW executives.
Separately, there has been no information from the FCA. We have followed up our initial referral of 2 1/2 years ago with letters to the FCA Chairman in October 2018 and November 2019 and we will send a further letter now. We are hopeful that they will eventually take decisive action, as they did in the Redcentric case where certain shareholders were partially compensated and three executives face prosecution.
Go here to learn about our campaign.
Blancco Campaign Co-ordinator