The L&H shareholders claim auditors at the Big Five firm should have spotted problems with the software company’s accounting practices when it conducted its audit, the Financial Times reported on Friday.
A lawyer representing the shareholder group told the FT: ‘It is inconceivable the auditors did everything they were supposed to do. There had to be red flags.’
KPMG did not wish to comment on the matter until it had received a copy of the complaint.
The announcement of the suit came as L&H lost chairman Roel Pieper after just two months at the helm. Pieper said he was resigning to give new chief executive Philippe Bodson ‘complete latitude to form a new management team to guide the company through the next stage of its recovery plan and beyond’.
Bodson replaced John Duerdon who lasted only five months. Duerdon had in turn replaced Gaston Bastians in August last year when accusations about L&H’s Korean sales operations began to emerge.
Yet another boardroom change accompanied Pieper resignation this week with co-founder Jo Lernout resigning his executive position, but staying on as L&H’s chief technology officer.
L&H is currently being investigated by the US Securities & Exchange Commission, after an independent audit, raised questions over the company’s sales figures from its Korean operations.
Following the audit, the company dismissed L&H Korea president and general manager Joo Chul Seo. At the same time Pol Hauspie, founder, co-chair and managing director, Nico Willaert, managing director joined Bastians in resigning their posts.
Earlier this month, the company was awarded bankruptcy by a Belgian court, while it faces insolvency proceedings.A commercial court granted the concordaat (Judicial Composition) putting Lernout & Hauspie under a six-month observation period, allowing the beleaguered company to implement its recovery plan.
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