We have closed this campaign as at 12 May 2022. The campaign achieved one objective of a fine of the auditors KPMG. However, the derisory amount (£3,500 plus costs of £2,743) questions whether the scale of the offence was fully recognised/punished by the regulator, the ICAEW.
At the December 2020 Blancco AGM, the Chairman, Rob Woodward said that:
* The FCA had posed a number of questions to the Company
* The Company had answered those questions
* The Company was never advised that the FCA were to undertake a formal investigation
* From the Company’s viewpoint, the matter was closed.
Woodward’s comments were in response to a question from ShareSoc Blancco Campaign Leader Bruce Noble.
We are disappointed at this failure of the regulator, the FCA, to report back to the complainant on the issues we raised in our 8 January 2018 letter. The issues included a potentially false market in the shares, the cashing in of Stock Appreciation Rights by the then CEO before the disclosure of the incorrect accounts, the inaccurate audit by KPMG, and the appointment of PwC as replacement auditors, when the Chairman of the Audit Committee was a former partner there and did not recuse himself from the decision.
Bruce Noble received a letter from Charles Randell, Chair of FCA, dated 3 October 2018 (9 months after our initial complaint to them), which included the comment: “I can assure you that work is being carried out on this matter and our markets team is looking carefully at the issues raised in relation to Blancco Technology Group plc.” Since then, Bruce has written further letters to Charles Randell, on behalf of ShareSoc, on 18 November 2019 and 3 August 2020, following up to ask for progress on the FCA’s action. There has been no reply to either letter.
Prior to publication of this update we contacted the FCA who confirmed that they had closed the case.
It would appear that there were sufficient grounds for the FCA to raise questions with the company, for the ICAEW to fine the company, but not to proceed with a criminal investigation which would take a long time and may not have been successful. It would appear to be a judgement call. We note however that the FCA have proceeded with criminal proceedings against Redcentric directors, which is a warning sign for other directors of the dangers of illegal actions and/or stepping very close to what may be illegal. Directors should be fearful of the consequences and we hope directors’ behaviour will improve where it does not currently meet the standards that stakeholders should expect.
ShareSoc is most grateful to Bruce Noble for the diligent, hard work he has put into this campaign and wishes to extend its thanks to him and is sure other ShareSoc members will echo these sentiments.
This is an official ShareSoc News item written by Cliff Weight, Director.