Australian firm Slater and Gordon has insisted there are no question marks over its acquisition of Quindell files – despite the UK company being investigated by financial regulators over historic accounting practices.
Slater and Gordon released a statement to the Australian stock exchange today in a bid to reassure investors following yesterday’s news that the UK Financial Conduct Authority will probe Quindell.
But the announcement appeared to do little to ease concerns among shareholders as Slater's share price tumbled 17% in a day.
Slater and Gordon said the FCA investigation relates to ‘historical statements’ made by Quindell in 2013 and 2014. The firm, which earlier this year acquired Quindell’s professional services division for £637m, reiterated that its due diligence on the deal had focused on ‘underlying assets’ rather than public statements from the UK company.
The Slater and Gordon statement said: ‘Slater and Gordon has been aware of the concerns raised publicly in relation to the accounting policies of Quindell at all stages of its engagement with Quindell.
‘Slater and Gordon remains confident in both its due diligence enquiries underpinned by asset-level due diligence into 8,000 cases by 70 lawyers over six weeks and its accounting policies which reflect historical evidentiary experience of case-file resolution in Australia and the UK.’
The statement revealed that, as part of its due diligence, annual revenue for the Quindell division was restated under Slater and Gordon accounting policies from £645m to £368m.
This is the second time in two days that the Australian firm, which holds around 12% of the UK personal injury market, has been moved to publicly reassure shareholders.
Yesterday the firm moved to deny reports it is being investigated by regulators in Australia over its relationship with auditor Pitcher Partners.
In a statement to the Australian stock exchange, the firm said it had not received any ‘targeted enquiries’ from the Australian Securities and Investments Commission.
The £637m buyout of Quindell’s professional services division was completed earlier this month after the FCA approved the deal.
Slater and Gordon has said it expects the deal to boost earnings per share by 30% in the first full year of ownership.