PENDRAGON’s auditing firm is under investigation by the UK’s reporting watchdog amid fears of insider trading, it has been announced.
The body is looking into KPMG’s conduct to check whether the firm was ‘properly independent’ when it audited Pendragon’s books in 2010 and 2011 – and also whether the auditor breached ethics ‘in relation to the non-timely disposal of a shareholding in a client entity.’
According to the Telegraph, the investigation centres on its chairman: Mel Egglenton. Egglenton reportedly became a non-executive director at Pendragon in December 2010 – just nine months after he stepped down from KPMG.
In a statement printed in the Financial Times, KPMG said it was ‘very disappointed’ that one of its partners ‘mistakenly failed to dispose of the relevant shares on a timely basis and that our firm’s procedures, in this instance, did not deal appropriately with that failure.’
‘We fully accept that the holding of shares in a client by a partner is in clear contravention of UK Ethical Standards.
‘However, on becoming aware of the matter, we took action in relation to the partner concerned and initiated a review of procedures to ensure that lessons are learnt and applied.’
