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Accounting Giant KPMG Fined £13 Million For Its Unethical Conduct In Silentnight Sale

KPMG, one amongst the big four accounting, auditing, and consulting firms of the world has received heavy penalties from an independent tribunal. Why?

For its misconduct in the 2011 sale of bed manufacturing firm ‘Silentnight’ to American Private Equity company named ‘HIG Capital’.

What Did KPMG Do?

As per reports from the tribunal, KPMG neglected the professional UK accounting principles of objectivity and integrity during the sale.

HIG Capital was a prospective client of KPMG and to maintain cordial relations, the accounting giant ignored the conflict of interest that HIG Capital and Silentnight might have.

HIG Capital bought the KPMG’s restructuring division in a deal worth more than £300 Million this year in the month of May.

Monetary Penalties

Apart from the £13mn monetary penalty, KPMG is also asked to pay £2.75 in related costs. The tribunal ordered the firm to appoint a new independent reviewer who would examine why the accounting misconduct wasn’t identified in initial phases and if something of similar sort has happened in previous cases too.

The independent reviewer will also make report on KPMG’s training and policies.

One of the retired partners of KPMG, David-Costley Wood was separately fined £500,000 for being involved in the misconduct. His insolvency license and membership of the ICAEW was seized.

Statement Of KPMG UK

David Costley Wood retired from KPMG in June 2021.

In a statement, the UK firm said “Mr David Costley-Wood has retired from the firm and whilst we no longer provide insolvency services, our broader controls and processes have evolved significantly since this work was performed over a decade ago”.

The KPMG penalty is still not the highest monetary fine in the industry. It is less than Deloitte’s £15 Million fine in 2020 for “serious and serial” failings in its audits of FTSE 100 software company Autonomy.

KPMG has pledged to pay attention to such matters in the future and ensure that any conflicts of interest that arise will be identified and managed promptly and efficiently.

Saqib is an established technical expert with 10+ years of background in Web Development and Digital Marketing. His passion for helping people in all aspects of online marketing flows through in the expert industry coverage he provides. He plans to take Clout News forward with the consistent support from you readers, friends and family! You can contact him at realsaqibmalik@gmail.com or Saqib@CloutNews.com

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