Quindell investigated by FCA

Insurance technology and claims management group Quindell is being investigated over alleged accounting irregularities.

The review by the Financial Conduct Authority (FCA) centres on public statements that the company made about its accounts in 2013 and 2014. The firm has admitted that some of its accounting policies were aggressive.

Quindell has conducted its own review, advised by PricewaterhouseCoopers (PwC). This internal investigation concluded that the accounting policies to revenue and acquisitions costs of some of its businesses, which have since been disposed of, were "at the aggressive end of acceptable practice". Some were found by PwC to be "not appropriate," the company added.

As rumours of these accounting irregularities emerged in 2014, investors saw the value of their shares drop dramatically – falling by more than 80 per cent.

In a statement, Quindell explained that a more conservative way of accounting for revenues and case acquisition costs would have changed how financial results would have been reported for the year ending 31 December 2013 and the six months ending in 30 June 2014.

Quindell, which has a market capitalisation of £555 million and revenues approaching £400 million, now has a new management team place – although the search for a new chief executive is ongoing. 

Restructuring programme

The has refocused its business on insurance technology services and has been going through a restructuring process after the sale of its professional services division to compensation claims firm Slater & Gordon for more than £600 million.

A spokeswoman for Slater & Gordon told the BBC that they had considered Quindell's accounting policies to be aggressive.

"Our assessment of the professional services division [PSD] was not based on their historical financial statements, but on a detailed bottom-up assessment of the key drivers of the business, applying our own accounting policies," she explained.

She added: "Quindell's historic accounting policies were irrelevant to our valuation of the PSD. We made this clear when we announced the acquisition and in all subsequent statements."

On Wednesday (June 24th), Quindell requested the temporary suspension of trading its shares on the Alternative Investments Market. Shares are currently frozen at 124.75p.