BusinessDesk: KPMG quits as Pyne Gould Corporation's auditor over related party transactions, adequacy of governance

BusinessDesk: KPMG quits as Pyne Gould Corporation's auditor over related party transactions, adequacy of governance

Pyne Gould Corp's auditor KPMG has quit after a disagreement as to what related party transactions the George Kerr-controlled wealth manager should disclose and the adequacy of its governance.

Pyne Gould "strongly rejects" the auditor's claims and has taken the "untimely resignation of KPMG very seriously," it said in a statement. The Christchurch-based wealth manager said it resolved to settle the "technical impasse on disclosure matters" by publishing whatever the auditor thought appropriate in its 2012 annual report.

KPMG's reason for resigning was "unresolved differences as to whether certain transactions should be disclosed as related party transactions, and concerns over the adequacy of governance and management of financial reporting," the statement said.

Since April 2, Pyne Gould has shifted its central accounting functions to Deloitte to "ensure a very high standard of internal accounting controls and activities," and will replace its auditor as soon as possible, it said.

The resignation comes a week after managing director John Duncan unexpectedly stepped down, after joining Pyne Gould in 2009 from a 15-year career with Macquarie Group.

Kerr replaced Duncan with immediate effect, having taken control of Pyne Gould via his Australasian Equity Partners No 1 LP (AEP) venture with US hedge fund Baker Street Capital.

AEP secured 76 percent of the company in a 37-cents-a-share takeover bid that closed in March.

Kerr argued the company's profile has changed since its divestment of the Marac finance unit last year, saying it won't make shareholder returns as it realises assets over a longer period of time.

The shares were unchanged at 34 cents in trading yesterday.

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3 Comments

would be bank HEARTLAND should make mr kerr an offer for his shares as the longer he is involved the harder it will become to obtain a banking liscence.
me thinks share price will head down unless this happens.

The Financial Markets Authority says it has made inquiries over related party transactions involving PGC over the past two weeks.
FMA chief executive Sean Hughes said in a statement: "I can confirm that FMA has been making inquiries over the past two weeks into issues regarding PGC and related entities, has been actively engaging with the company in relation to these issues, and is aware of the issues between KPMG and PGC.
http://www.nbr.co.nz/article/fma-confirms-active-engagement-pgc-wb-117799
 
This story has legs
 

When the auditor of a public company resigns it is usually the kiss-of-death.

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