Saturday 25 November 2017

Shareholders demand answers from Deloitte over RSA 'black hole'

Simon Lee, who resigned from the RSA
Simon Lee, who resigned from the RSA

SOME of RSA's biggest shareholders are demanding to know why Deloitte failed to spot accounting irregularities at its Irish arm when the auditor was looking at the accounts.

The 'Financial Times' reported that four of RSA's largest 15 shareholders are demanding an explanation from Deloitte now that RSA chief executive Simon Lee (pictured) has quit.

Investors said they raised concerns about Deloitte's independence from RSA last year and these concerns have incre-ased since the group issued three profit warnings in the past six weeks.

RSA has admitted to accounting irregularities in Ireland and must now bolster reserves by £200m (€240m) here.

Analysts have warned the group needs to raise up to £1bn to shore up its finances.

Some analysts told the Irish Independent that the insurer is vulnerable to a takeover bid.

RSA's accounts for last year were signed off "for and on behalf" of Deloitte by David Barnes, senior statutory auditor. RSA replaced Deloitte, its auditor since 2007, with KPMG in May.

SPECULATE

"We are no longer auditor to RSA and it would not be appropriate to speculate on the detail behind recent statements.

"Deloitte is committed to delivering the highest quality audit services," the auditor told the newspaper.

A fund manager at one of RSA's biggest institutional investors told the newspaper: "We would like a clear explanation over why these accounts were signed despite this big black hole? There are question marks over the audit committee at RSA too."

Irish Independent

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