BDO doesn't expect US 'capital call'
‘Capital call’ from the US firm BDO Seidman is ‘hypothetical’ says BDO Stoy Hayward's senior partner Jeremy Newman
BDO Stoy Hayward’s senior partner Jeremy Newman has said requests for funding
from BDO International firms by BDO Seidman are ‘hypothetical’ and that he does
not expect the UK firm to be called upon.
The Bowman
Report from the US recently suggested that it expected there may be
some kind of ‘capital call’ from the US firm following the huge verdict against
it over Bankest.
Whether that would mean US partners being called upon, outside investors in
the US coming to help capitalise the firm, or support from fellow members of the
international network, remains unclear.
The firm is facing a mammoth $520m (£250m) bill in the US following a finding
of gross negligence in its audits of Bankest, a factoring group.
‘We believe that BDO will win some relief on appeal and survive. The days
between now and then, however, will be lean. The firm may make a capital call to
help bridge the gap,’ the report said.
But Newman said: ‘It is a hypothetical question,’ adding that there was no
mechanism for the US firm to ask for funds from elsewhere and that he did not
expect the US firm to have difficulties dealing with the issue in the short
term.
Though Banco Espirito Santo’s lawyers had initially failed to get the suit
extended to BDO International, they are appealing the verdict.
A spokesman for BDO Seidman said: ‘To be talking about a capital call is
crazy, irresponsible and incorrect. If any damages end up sticking it won’t be
for two to three years.’
Partners and clients were all staying put, he added.