17 Nov 2015 10:24am

HBoS whistleblower lambasts KPMG

HBoS whistleblower Paul Moore has criticised Big Four firm KPMG over the its investigation into the bank in early 2005

In an email seen by economia, Moore tells Simon Collins, KPMG UK chairman, that the Big Four firm “is accountable for a very serious wrongdoing”.

The row has blown up just days before the publication of a report conducted by the Financial Conduct Authority (FCA) and the Bank of England (BoE), examining HBoS’ collapse and subsequent bailout by Lloyds in 2008.

In the email, Moore tells Collins that KPMG’s 2005 independent investigation into HBoS was a “cover-up” and “downright dishonest”. Moore has consistently alleged that the subsequent report on HBoS by KPMG “set in motion a train of events which was an obviously foreseeable central cause of the HBOS disaster”.

Moore, previously head of group regulatory risk at HBoS and a former KPMG partner, emerged as a whistleblower after he was dismissed by HBoS in 2004. Moore said this was because he had made warnings to the bank’s board that HBoS was taking excessive risks with its aggressive sales culture.

Collins was unable to comment but a KPMG spokesperson said the firm stood by its work with HBoS and said the firm would be unable to comment further until the joint report is published on Thursday.

The spokesperson said, “We believe that it is appropriate that the events are investigated fully and we have co-operated fully during the course of the ongoing joint PRA and FCA review. We have always maintained that our work in relation to HBoS was sound but, given the ongoing review, cannot comment further.

“In intermittent correspondence with Paul Moore we have maintained that the current review is the appropriate means to consider the issues and have encouraged him to make any relevant evidence that he holds available to the PRA, FCA or the FRC so that it may be properly taken into account.”

Talking to economia, Moore said that he was a “huge believer” in audit, but added that for too many professionals it was a “tick box mechanism”, explaining that it should be separated from other professional work.

“If we can’t rely on our professionals because they are more interested in their non-audit fees, we need a real root and branch review,” Moore said.

Oliver Griffin


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