Sanctuary sacks audit firm

Sanctuary Group has decided to sack Baker Tilly, the firm which last year
qualified the music group’s accounts.

The group has had high-profile accounting issues in the last year, and
proposes to switch to KPMG.

Baker Tilly said Sanctuary understated losses in 2005 by £15.9m. ‘The
financial statements do not give a true and fair view of the state of affairs of
the group,’ the firm said.

Senior sources at Sanctuary complained earlier this year that a Big Four firm
had given the accounts a clean bill of health, openly questioning Baker Tilly’s
opinion.

The company is proposing to appoint KPMG when it holds its AGM on April 28,
though analysts have said it could have trouble getting the move through.

The shareholdings of the group have been shaken up recently by the company’s
£110m fundraising, with two hedge funds taking stakes. Och Ziff and Trafalgar
Asset Managers, have both invested in the group.

Sanctuary would only say that the change of auditor was part of a ‘fresh
start’.