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Danny McCance 15 Aug 2019 02:58pm

Former client reports Deloitte to FRC

Allegations of negligence have been levelled at Big Four firm Deloitte as it has been reported to the Financial Reporting Council (FRC) by former client Elfed Thomas

Thomas, co-founder of now-defunct telecoms company H20 Networks, reported its former auditor Deloitte to the watchdog following an independent review he commissioned, according to the Financial Times.

He has also reportedly opened up legal proceedings against the firm through legal representatives Keystone Law.

According to the FT, the report provided to the FRC alleges that in its audit of H20 Networks’ 2009 and 2010 accounts, Deloitte missed information that could have uncovered a fraud committed at the company.

H20 Networks, which provided fibre-optics cable connections through sewer channels, was found to have been involved in a £160m fraud following an investigation by the Serious Fraud Office and went into administration in 2011.

In February 2017, four individuals at the company were found guilty of conspiracy to make corrupt payments and commit fraud against Barclays Bank and KBC Lease, while Thomas and co-defendant Kerry Lloyd were both acquitted.

An FRC spokesperson said the watchdog does not comment on individual companies.

“As with all reports and accounts of companies that fall within the FRC’s remit, if there is evidence to suggest non-compliance or audit failures we would review in accordance with our usual procedures,” they said.

Deloitte declined to comment on the matter.

A spokesperson for Keystone Law said it was investigating the situation and was unable to provide any comment at this stage.

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