KPMG and Barclays sued for ‘engineering’ administration of quarrying company

KPMG and Barclays sued for 'engineering' administration of quarrying company

Both Barclays and KPMG strongly refute allegations they conspired to lead a subsidiary into administration

KPMG and Barclays sued for ‘engineering’ administration of quarrying company

Quarrying company Portland Stone Holdings Limited is suing Barclays and KPMG for ‘engineering’ the administration of its subsidiary, Stone Firms Ltd, in 2010.

The Portland Stone suppliers allege that the Barclays business support unit was ‘an internal profit centre’ which aimed to make money rather than work in its clients’ best interests, and further accuses administrators KPMG of conspiring with the bank, according to This is Money.

Both Barclays and KPMG strongly refute the claims.

The subsidiary went into administration after years of successful trading as it encountered a cash flow crisis following issues surrounding a new quarry and factory.

At the time of administration, Ian Corfield, KPMG’s restructuring director, said: “The business has suffered a severe decline in revenue over the last two years as a result of the economic downturn which has had a huge impact on the construction sector.”

“Unfortunately this led to a shortfall of cash and insurmountable pressure from creditors, leaving the directors no alternative but to request the appointment of administrators.”

Barclays said the decision to go into administration was “a straightforward case of Stone Firms Limited becoming insolvent” due to the actions of owner George Smith, who “allowed a huge unpaid debt of over £760,000 to HMRC to build up”.

When the quarry company was unable to pay the debt, it was forced into administration.

In response to the lawsuit, a KPMG spokesman added: “We strongly refute the allegation that KPMG or the officeholders acted improperly.”

“We believe this claim has no merit in fact or law and we will continue to vigorously defend the firm and officeholders against it.”

The company was one of the last remaining suppliers of Portland stone, a popular type of limestone used in the construction of St Paul’s Cathedral and Buckingham Palace, among other famous monuments.

KPMG is also currently embroiled in a legal quagmire in South Africa, in relation to its handing of the Gupta family’s accounts.

The Big Four firm was also recently appointed administrator of airline Monarch and auditor of FTSE 100 company Croda.

Related Articles

KPMG celebrates two years as a Disability Confident Leader

Big Four KPMG celebrates two years as a Disability Confident Leader

1w Beth McLoughlin, Managing Editor
KPMG does charity abseil for NSPCC partnership

Big Four KPMG does charity abseil for NSPCC partnership

2m Lucy Skoulding, Reporter
Debenhams now working with KPMG team amidst CVA worries

Big Four Debenhams now working with KPMG team amidst CVA worries

2m Emanuela Hawker, Reporter
FRC data on Big Four audits may highlight need for industry overhaul

Audit FRC data on Big Four audits may highlight need for industry overhaul

3m Lucy Skoulding, Reporter
Deloitte latest Big Four player to offer legal services in bid to become more holistic

Big Four Deloitte latest Big Four player to offer legal services in bid to become more holistic

3m Lucy Skoulding, Reporter
Another accounting error for BT Group as £500m pension deficit mistake revealed

Audit Another accounting error for BT Group as £500m pension deficit mistake revealed

3m Lucy Skoulding, Reporter
KPMG South Africa hit hard as more clients sever ties following audit scandals

Audit KPMG South Africa hit hard as more clients sever ties following audit scandals

4m Lucy Skoulding, Reporter
PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

Audit PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

4m Alia Shoaib, Reporter