Friday 12th May 2017
Seven years is a long time to wait but at long last, PwC, the auditor to Connaught Plc, the latter which collapsed into administration due to accounting irregularities in early 2010, has finally been fined for signing off the books.
|PwC fined £5 million|
Source: Sky News
The full story can be read here: PwC has been fined a record £5m for failures relating to its audit of FTSE 250 property services firm, Connaught.
Here I am, looking somewhat younger and more sprightly ...
|City Sceptic Strikes|
Source: Financial Times
Readers may note the amusing commentary from Connaught's CEO at the time, Mr Mark Tincknell.
After I issued a Sell note on Connaught, Mr Tincknell sent an email round to other sell side analysts, investors and the media telling them that I was under the pay of hedge funds - that were short of the stock, that I was generally incompetent, and had got all my numbers wrong. He had a point with regards to my numbers. I'd massively underestimated the bad debts, and other borrowings that Connaught had hidden.
There were several lessons I learnt from that period.
- Crooked management will go to great lengths to smear and traduce those who speak out against them.
- Director purchases are meaningless when not placed into context or it is not revealed how those purchases may have been financed. See here and here.
- Other sell side analysts will not hesitate to rally to the defense of crooked management.
- Anyone that speaks out against a company will generally be ignored by its major investors who fall into a peculiar state of denial.
- When things unravel, the company blows up faster than you can say "das ist nicht so gut".
Not a lot has changed.
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