Blues Saga: Auditors slam BIH board for being ‘reckless’
AUDITORS acting for Birmingham City FC owner Birmingham International Holdings have slammed the parent company’s board of directors and accused them of being “reckless”.
The accusation follows the BIH’s board announcement earlier this week that a former employee may have misappropriated £2.55m from the business.
In its statement to the Hong Kong Stock Exchange, BIH said it was concerned auditors overseeing the accounts for the year ending June 2014 had somehow missed the discrepancy.
Now, JH CPA Alliance – which is no longer retained by BIH – has hit back at the allegation and has withdrawn its report for the most recent set of accounts. It has also criticised the board for its lack of co-operation while preparing the report.
Its letter to the BIH board was published by BIH in its latest update to the Hong Kong Stock Exchange.
The letter states: “We regret that despite continuous and repetitive requests to the company’s board of directors for the return of signed letter of representation, directors’ declarations regarding their remuneration and the company’s audited financial statements for the year ended June 2014 for our completion, there had never been any response from the company or the board.
“We also noted that the company issued an announcement on January 19, 2015 referring to a possible offence committed by an ex-employee of the company.
“Furthermore, the announcement contained wordings relating to our work and we have clearly expressed our concern, reservation and objection to those reckless comments.”
It added that even though the Audit Committee and the BIH board had approved the financial statements for the year ended June 2014, the board had not signed and returned the financial statements and had requested documents for the auditors to further process.
It said the delay in the response to its requests had been unreasonable and therefore the report into the accounts had yet to be signed off.
The letter concludes: “Together with the outburst of the said possible offence, we need to gather further information to assess the possible corresponding financial effect, if any, to the company due to the incident. Before such clarification to be made, the published financial statements for the year ended June 2014 might be misleading.
“As such, we hereby deny and withdraw our auditors’ report to the shareholders of the company for the year ended June 2014.”
BIH said it was considering the validity and implications of the withdrawal of the report and was in the process of seeking advice from the Hong Kong Institute of Certified Public Accountants (HKICPA) and its professional legal advisers on the matter.
The company said it would publish further announcements on the matter when it had more information. In the meantime, BIH shares remained suspended on the HKSE.
