The Financial Conduct Authority (FCA) has confirmed it has launched an investigation into professional services company Quindell, looking at public statements made regarding the company’s 2013/14 financial accounts – covering the period it owned a raft of legal brands.
Quindell, which sold its professional services division including its legal services to Australian law firm Slater & Gordon earlier this year, has also suspended trading in its shares on AIM and is conducting a review, along with its auditors, of a number of the company’s historic transactions and acquisitions.
In a statement, Quindell, which grew through a spate of legal provider acquisitions, said that following PwC’s internal review last year it had identified certain accounting policies which ‘were largely acceptable but were at the aggressive end of acceptable practice’.
The investigation and suspension of shares is the latest in an on-going saga for the company which saw its share price fall last year after a note published by Gotham City Research called into question accounting policies, particularly with regards to its handling of noise-induced hearing cases. The Alternative Business Structure (ABS) then brought in PwC in December to carry out an independent review, evaluating the group’s main accounting policies and cash generation expectations for 2015.
However, in March this year, Quindell sold off its professional services division to Slater & Gordon – a business which it said generated revenues of nearly £180m in just the first half of 2014. The division covered legal services mostly relating to personal injury but also includes marketing and motor services. The legal services piece employs around 1,400 and operates under a range of brands including Silverbeck Rymer, Pinto Potts and The Compensation Lawyers while the complementary services has around 1,000 staff members.