Slater & Gordon shares slide
AUSTRALIAN legal giant Slater & Gordon – one of the biggest consumer law firms in this country and a major force in the North West – has seen a sharp fall in its share price.
The firm, which has swallowed a host of well known firms including Fentons, Pannone and Russell Jones & Walker in a deals spree over the last three years, saw its shares slump more than 20% when it revealed errors in its financial reporting and said Australian regulators would launch an investigation.
The falls followed investors’ concerns about its recent £637m acquisition of the professional services arm of Quindell — the listed insurance and legal services business which is under investigation here.
Slater & Gordon said in a statement it would co-operate with the Australian Securities and Investments Commission, which is reviewing Pitcher Partners, the Australian law firm’s auditors.
“The company was notified by Pitcher Partners that Asic intends to raise some queries directly with the company.” Slater & Gordon said in a statement to the ASX.
The firm said it uncovered a “consolidation error” in the reporting of historical UK cashflows during an analysis of financial information to be provided to Asic. The law firm said it would attach a note to its 2015 financial accounts, but added that net operating cashflows were unaffected.
It said it has engaged Ernst &Young to independently assess its responses to Asic.
In March, S&G announced its biggest deal — the acquisition of the professional services arm of Quindell for £637m. The division, which has hundreds of staff in Liverpool, was described as a “transformational opportunity” by Andrew Grech, Slater & Gordon’s managing director.
But some analysts have expressed concerns over the acquisition, and news last week from Quindell that it is the subject of a Financial Conduct Authority inquiry spooked investors.
Slater & Gordon said it was confident that no liability would arise from the FCA’s engagement with Quindell, which concerns public statements of Quindell during 2013 and 2014.
