FCA launches probe into Quindell’s alleged accounting irregularities
The UK Financial Conduct Authority (FCA) has launched an investigation into the insurance technology and claims management group, Quindell, over alleged accounting irregularities.
In a statement, the FCA confirmed that it is probing Quindell under the Financial Services and Markets Act 2000 in relation to public statements made regarding the company's financial accounts during 2013 and 2014.
"The FCA will liaise with other agencies regarding these matters as appropriate."
Quindell said that it had temporarily suspended trading of its shares from Alternative Investment Market and will fully cooperate with the investigation.
Trading is expected to resume before the company publishes its annual results, which is scheduled by the end of this month.
Apart from the FCA probe, the company, along with its auditors, had also started its own review of acquisitions and other deals it had executed under its previous management.
According to the Guardian, the valuations of Himex and Ingenie, which represent Quindell's biggest acquisitions under its previous management, have been questioned by the industry analysts.
Additionally, an independent review undertaken by PricewaterhouseCoopers in December 2014 found that some of the accounting policies relating to recent revenue and acquisition costs in some of its businesses were 'at the aggressive end of acceptable practice.'
Quindell said in a statement: "The company also confirmed that it had identified that certain of the accounting policies historically adopted by the company, in respect of recognising revenue and deferring case acquisition costs in a number of the croup's disposed of businesses, were largely acceptable but were at the aggressive end of acceptable practice."
The company expects to be in a position soon where it can publish additional information regarding its acquisitions and to make necessary corrections.
Quindell also noted that it will adopt a more conservative and appropriate approach to its accounting, that will 'impact' its numbers for 2013 and the first-half of 2014.
Image: Quindell is being investigated by the FCA in relation to public statements made regarding its financial accounts during 2013 and 2014. Photo: courtesy of Kittisak/©2015 FreeDigitalPhotos.net.