New probe into £35m Wiggins controversy.

Wiggins auditor HLB Kidsons and a non-executive director are facing investigation after the UK’s financial reporting regulator forced the company to cut its 2000 profits by £35m.

Chris Dickson, executive counsel of the Joint Disciplinary Scheme, will examine the role of Lance Blackstone, chartered accountant and chairman of the leisure to construction group’s audit committee, and that of the auditors from mid-tier firm Kidsons.

A spokeswoman for Kidsons said the firm was aware it might be subject to an investigation and it intended to fully comply with any probe once it had received official notice from the institute.

ACCA-qualified Leslie Inwood, company secretary for the leisure and construction group, could also appear before an internal disciplinary board at his institute.

An ACCA spokesman said: ‘We are aware of the concerns surrounding the Wiggins Group but beyond that we cannot make any specific comments.’

The ICAEW referred the case to the Joint Disciplinary Scheme following a review of the Financial Reporting Review Panel’s findings published in March.

Wiggins was forced to restate its accounts by millions of pounds for the last five years, turning each to a loss. Its £25.1m profits for the year to 31 March 2000 became a £9.9m loss. Profits going back to 1995 also turned to losses, after a dispute over revenue recognition and development costs.

Speaking at the time of the reissue, Richard Sykes QC, chairman of the FRRP, said investors should be able to rely on Wiggins’ published accounts, but could not because of accounting errors.

COUNTING THE COST OF NEGLIGENCE

The Joint Disciplinary Scheme has faced a rapidly growing workload over the past 18 months due to the number of negligence cases against accountancy firms. In the last seven years the JDS has received fines from UK firms totalling almost £5m.

See: Past haunts Big Five, page 28.