Sanctuary shareholders ditch mid-tier firm

Sanctuary this morning gained overwhelming shareholder approval for its
controversial plan to ditch mid-tier firm Baker Tilly as its auditor.

Baker Tillly had qualified the group’s accounts, and their sacking so soon
after that has raised corporate governance issues.

At the Sanctuary Annual General Meeting today, shareholders approved the
appointment of new auditors KPMG, with a total of 130 million votes in favour
and fewer than 100,000 against. The news comes as the group disclosed further
restatements to its interim numbers from last year, and faces a probe by the
Financial Reporting Review Panel as a result of its qualified accounts.

The issue was the only resolution at the meeting to attract questions, with
private shareholders anxious to gain reassurance as to why Sanctuary had made
the move.

Jagdish Raj Sharma, who holds a small stake in the group, asked directors
what the problem with Baker Tilly had been.

New chairman Bob Ayling told the meeting: ‘It’s good corporate practice to
review from time to time the appointment of auditors and to invite a number of
firms to make proposals to the company.’

Ayling disclosed that he had been present at auditor presentations, and that
he endorsed the choice of KPMG: ‘The best presentation in the interests of the
company came from KPMG,’ he said.

A separate shareholder questioned whether the decision had been made on cost
grounds, saying that he had concerns about lower costs meaning a lower standard
of auditing.

Current head of the audit committee Tina Sharp said: ‘Cost certainly wasn’t
the be all and end all. The decision was made based on their knowledge of the
sector and the services and help they could offer us in the future.’

None of Sanctuary’s directors would answer questions after the meeting.

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