Watchdog in shock Quindell accounts probeComments Off on Watchdog in shock Quindell accounts probe
The company — which suspended its shares on AIM for the second time this year — said it would “co-operate fully” with the Financial Conduct Authority’s investigation “in relation to public statements made regarding the financial accounts of the company during 2013 and 2014”.
The FCA confirmed the investigation and said it would “liaise with other agencies regarding these matters as appropriate”.
Accendo Markets analyst Augustin Eden labelled the company a “comedy show” and said: “I wouldn’t even attempt to imagine what the FCA might find. You wouldn’t be able to make it up.”
The probe comes after an earlier review of Quindell’s books by PwC found its accounts were “at the aggressive end of acceptable practice” and said the provisions for noise-induced hearing loss cases in its legal division — since sold to Australian law firm Slater & Gordon — were “not appropriate”.
Quindell said a more “conservative” approach will “materially impact” previous results for that division. But the company’s new management is also launching a review of the “historic transactions and acquisitions” with which Terry (pictured) built Quindell into a £2 billion empire at one stage.
The firm — now hunting for a new chief executive after Robert Fielding left last month — will announce “additional information” on the deals and make “associated corrections”.
Quindell has been on the back foot for more than a year since short-seller Gotham City Research labelled it “a country club built on quicksand”. Quindell sued for libel and won by default when Gotham failed to defend itself.
Terry quit as chairman last November after taking part in an opaque share-buying arrangement under which it originally appeared that he and two other directors had increased their holdings. However, it later emerged that their stakes had in effect been reduced due to a sale-and-repurchase agreement.
This was the second time he had been forced to quit a company he founded, having previously resigned from the board of outsourcer Innovation Group in 2003.
Terry’s latest venture is tech investment firm Quob Park Estates, a shareholder in broker Daniel Stewart. Terry was “in meetings” today when contacted at Quob Park’s Fareham headquarters.