BDO quits as Birmingham City auditor

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BDO has quit as auditor of Birmingham City FC parent Birmingham International Holdings. The move is with immediate effect BIH confirmed in a statement.

BDO said earlier this year it was sceptical over whether it had received full disclosure from the club and given the amount of information made available to it by the club’s directors it could not say with any confidence whether the club was a viable going concern.

BIH said it was notified of the BDO decision by letter.

“The letter states that BDO resigns with immediate effect due to the auditor being unable to obtain consistent, reliable and complete audit evidence and due to the auditor having reservations on the effectiveness of corporate governance and the system of internal controls of the company,” it said.

BIH said that since the appointment of Peter Pannu as managing director in September, immediate attempts had been made to take the audit forward and a meeting with BDO and the audit committee was called to address the issue in detail.

“This was followed up by a formal reply to BDO on October 19, 2012, updating the auditor on the outstanding issues and further a detailed email was sent from the managing director to BDO dated  October 27 attempting to further bridge the audit gap with the auditor and to narrow down the audit issues,” continued the statement.

“The company had also been seeking in vain a further audit meeting with BDO since the letter dated October 19 from the company. In addition to the aforesaid, upon the requirement of The Stock Exchange of Hong Kong Limited, Somerley Ltd was appointed on October 3 as the compliance adviser of the company and preparations are well underway for the appointment of a consultancy firm for a comprehensive review of the internal control and corporate governance systems and preparation of suitable corporate manuals to enhance operations.”

BIH said it was actively seeking a successor to BDO as auditor and until such time as a firm was found, it would be unable to publish its annual results for the year ended June 30, 2011, interim results for the six months ended December 31, 2011 and annual results for the year ended June 30, 2012.

Plans to despatch its annual report for 2011, interim report for 2012 and annual report for 2012 have also been put on hold.

BIH said it would issue a further statement informing shareholders on the date of release of the Annual Results 2011, Interim Results 2012 and Annual Results 2012 and the appointment of a new auditor in due course.

“As a result of the delay in publication of the Annual Results 2011, Interim Results 2012 and Annual Results 2012, the board meeting for the purposes, among other things, of approving the Annual Results 2011, Interim Results 2012 and Annual Results 2012 are therefore postponed to another date to be fixed. The company will make another announcement regarding the rescheduled date of the board meeting in due course,” it added.

BDO has made no formal comment.

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