Business

Quindell under investigation by financial regulator

FCA logo Image copyright Reuters

Quindell, the insurance technology and claims management group, is under investigation by the Financial Conduct Authority (FCA) for alleged accounting irregularities.

The FCA investigation centres on public statements that Quindell made about its accounts in 2013 and 2014.

Trading in the company's shares was temporarily suspended on the Alternative Investment Market.

Quindell has admitted that some of its accounting polices were "aggressive".

The group has been conducting its own review, advised by accountancy firm PricewaterhouseCoopers (PwC).

The review concluded that accounting policies relating to revenue and acquisition costs in some of its businesses - since disposed of - were "at the aggressive end of acceptable practice".

PwC also found that some other policies were "not appropriate", the company said.

Investors saw more than 80% wiped off the value of their shares in a disastrous 2014, as rumours of the accounting irregularities emerged.

A more conservative way of accounting for revenues and case acquisition costs would "materially impact previously reported results for the year ended 31 December 2013 and the six months ended 30 June 2014", the company said in a statement.

Quindell, which has a market capitalisation of £555m and revenues approaching £400m, has been restructuring following the recent sale of its professional services division to compensation claims firm Slater & Gordon for more than £600m.

Responding to the news, a Slater & Gordon spokeswoman told the BBC: "We have always been of the view that the accounting policies of Quindell plc were aggressive.

"Our assessment of the professional services division [PSD] was not based on their historical financial statements, but on a detailed bottom-up assessment of the key drivers of the business applying our own accounting policies.

"Quindell's historic accounting policies were irrelevant to our valuation of the PSD. We made this clear when we announced the acquisition and in all subsequent statements."

Quindell has a new management team in place, but is still searching for a new chief executive. It is refocusing its business on insurance technology services, which include the in-car telematics equipment that measures people's driving habits.