Big Four accounting firm KPMG plans to restructure its unit to advise on restructuring just months after selling the UK’s largest bankruptcy advisory business for over £ 350m.
Sky News has learned that KPMG has appointed UK restructuring market veteran David Fletcher as an associate partner to its trading advisory team.
Fletcher’s appointment raises questions in this area as to whether KPMG plans to build a full-service competitor to other major accounting firms and independent players.
The sale of the UK’s restructuring division after months of talks with future buyers has caused KPMG to plunge more than expected.
With the support of private-equity fund HIG Europe, this unit was named Interpath Advisory.
it was Sold by KPMG Primarily because it pressured the Big Four accounting firms to eliminate potential conflicts of interest as a result of a series of accounting scandals that shook confidence in the profession.
KPMG was involved in many of these crises and was warned last week by accounting regulators that it was fined more than £ 15m for flaws associated with the sale of bed maker Silentnight in 2011.
Fletcher is not a bankruptcy licensed practitioner, and KPMG has agreed to a three-year non-compete agreement with Interpass in the bankruptcy market, according to someone close to the recent sale.
However, insiders acknowledged that Fletcher’s work on KPMG’s special situation team includes work with clients facing “elements of financial difficulty.”
Bill Michael resigned after making a bad comment
Former BDO partner Fletcher recently held a senior position in HSBC’s European loan management department, according to a LinkedIn profile.
According to industry sources, Mr. Fletcher has revealed that he did not rule out the rebuilding of the bankruptcy team after the non-compete obligation expired.
This can question KPMG’s approach when the Financial Reporting Council pays particular attention to the operations of the four largest corporations.
Deloitte also sold its UK restructuring division, which was acquired by corporate advisory group Teneo earlier this year.
In contrast, EY and PricewaterhouseCoopers have shown little interest in offloading units that work with financially deprived clients.
Prior to selling what became the Interpass, KPMG worked on some of the pandemic’s most prominent restructurings, including acting as the manager of a shopping center giant. Intu property To part of the Arcadia Group, the former High Street Empire of Sir Philip Green.
All four major auditors have submitted plans to the Financial Reporting Council (FRC) to show how to “operationally separate” the audit and consulting departments over the next four years.
That impetus came after accounting scandals at companies such as BHS and Carillion collapsed after losing tens of thousands of jobs.
KPMG worked on managing Intu, the owner of the shopping center, prior to the sale of the restructuring division.
Prior to its extinction, KPMG was Carillion’s auditor and the Financial Reporting Council has completed its investigation, which could result in significant fines within the next few months.
Sky news Revealed last week KPMG had received a letter prior to a proceeding by an official recipient prior to a claim for damages estimated to be worth £ 250 million.
The stricter restrictions imposed by regulators mean that auditing firm restructuring teams are far more limited in the role they can assume in corporate restructuring if the firm has been audited in recent years.
KPMG continues to tackle the leadership crisis this year, with UK chairman Bill Michael resigning after making a number of unjustified comments over the phone with his colleagues.
He was replaced by John Holt as the boss of a British company.
KPMG declined to comment.
Sourced from Eminetra - written by Bellacangelosi