10:13 am, June 26, 2019
THE Financial Conduct Authority has launched a review into the sales processes of Lookers, one of the UK’s leading car dealership groups.
The announcement sent shares in the company tumbling, although some of the decline experienced yesterday afternoon was reversed this morning.
At 3pm yesterday, Lookers shares were valued at 67.6p; at 9.30am this morning the price stood at 57.4p – a drop of 15 per cent.
Lookers described the FCA probe as ‘a review into the controls and processes of its regulated activities’.
In a statement, it said: ‘Adapting to developments in regulation affecting the motor retail industry and the fast pace of change of customer demands and behaviours is a key challenge and an important priority for the group.
‘As disclosed in the 2018 Annual Report and Accounts, during last year the Board became aware of certain matters requiring review in some areas of the business subject to regulation by the Financial Conduct Authority (FCA).
Improvement required
‘In December 2018, the Board commissioned an independent review of the group’s internal control, risk assurance systems and internal audit.
‘This review, which we shared with the FCA, indicated that there were some control issues in the sales process in the group’s regulated activities which will require an improvement plan to be implemented. We have invested in both our internal capabilities and external advice. The project will be completed and agreed actions will be implemented as soon as possible.’
Lookers added that the probe would cover the period of January 1, 2016 to June 13, 2019.
‘The FCA investigation is newly commenced and no findings have been made,’ it added. ‘The FCA will reach its conclusions in due course and, at this stage, the company cannot estimate what effect, if any, the outcome of this investigation may have. The company is co-operating fully with the FCA in relation to this and will update the market further when appropriate.’
Lookers is a multi-franchise dealer group which represents 32 volume and premium car manufacturers throughout the UK and Ireland.
Pictured is the company’s Volkswagen dealership in Battersea, south-west London, for illustration purposes.
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