Good morning!


Quindell (LON:QPP)

FCA investigation - big news this morning, as Quindell shares have been suspended - the main reason looks likely to be that they won't be able to file 2014 audited accounts by the deadline of 30 June 2015.

There are two announcements today, the first one from Quindell, which I have summarised below;

  • Changes to 2013 & 2014 accounts will "materially impact" previously reported figures, following the accounting review by PWC.
  • Accounting changes are of historic interest only, since the main division has already been sold to Slater & Gordon.
  • A further review of historic transactions & acquisitions will soon reveal "more complete information", and "ensure that any related party transactions are fully disclosed, and make associated corrections". These are "largely non-cash items".
  • Shares have been suspended until this work is complete, and will be restored to trading once the 2014 accounts are published.
  • The FCA has recently begun an investigation into public statements made by Quindell re its accounts, in 2013 and 2014.


Furthermore, the FCA was hot on the heels with their own RNS this morning, confirming their investigation, and the possible involvement of "other agencies" - hopefully the SFO.

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My opinion - obviously I don't want to pre-judge the investigations into QPP, but it seems to me that this investigation has been a long time coming. Tom Winnifrith did some remarkable investigative work on QPP last year, unearthing all sorts of peculiar & suspicious things.

Now it's true that Tom's style may not appeal to everyone - he's a bit over the top. Which is like saying that the Titanic was a bit wet! However, he deserves enormous praise for correctly identifying that things were badly wrong at QPP, and that fundamentally the company had a dishonest culture, and that the accounts could not be relied upon.

Without wishing to blow my own trumpet too much, I think I was the first commentator to point out red flags about Quindell's accounts, and indeed I warned readers here as early as Dec 2012 that my instincts were telling me that something wasn't right at Quindell, specifically (and prophetically) from my report of 18 Dec 2012:

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I flagged rising debtors as a concern in my SCVR of 15 Jan 2013, then in my report of 9 May 2013 I unearthed details of how…

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