Wood Group accounts flagged by watchdog as far back as 2017

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.Crimson flags have been raised over Wooden Group’s monetary statements way back to 2017, in keeping with company and regulatory data that point out persistent questions over its accounting practices.The London-listed firm — which the UK’s monetary markets regulator is now investigating as £242mn takeover talks languish — needed to restate an earnings assertion after being questioned over its 2022 annual report by the nation’s accounting watchdog. It was the second time the Monetary Reporting Council had discovered issues with Wooden’s accounts.The vitality engineering firm’s administrators additionally criticised three separate inside audit reviews masking sure enterprise divisions in 2022 and 2023. One was an “unsatisfactory” audit into Wooden’s tasks division, its second-biggest by income. The unit is on the centre of a disaster after an unbiased overview by Deloitte — prompted by conversations with Wooden’s auditor KPMG — discovered “materials weaknesses and failures” in its monetary tradition, together with info being withheld from auditors. It marks the most recent signal of bother at Wooden, which has needed to droop its shares whereas it restates accounts for 2023 and 2022 and prepares these for 2024, complicating a possible takeover by the United Arab Emirates-based Sidara.Sidara declined to remark. It was nonetheless intent on seeing the deal “over the road”, in keeping with one individual near the corporate.“These points complicate life for everybody concerned, however the push continues,” the individual mentioned.Wooden has prolonged the deadline for Sidara to finish its supply a number of occasions, with the present goal set for the top of July. Earlier than its stoop, Wooden had been a homegrown success story of the UK’s growth of its North Sea sources. It had a market capitalisation of greater than £5bn as lately as 2018 however has been struggling since a £2.2bn takeover of Amec Foster Wheeler in 2017 left it with excessive money owed and authorized liabilities. Its market cap fell to about £126mn earlier than its shares have been suspended on Could 1.The corporate introduced on June 27 that it was being investigated by the Monetary Conduct Authority, the UK’s monetary regulator, following the Deloitte overview. The FCA, which might impose swingeing fines, can examine listed corporations past the monetary sector for the accuracy and timeliness of statements made to the market.Individually, Wooden’s finance chief Arvind Balan, who joined the corporate in April final yr, resigned in February after admitting misstating his accounting {qualifications}.The FRC can overview an organization’s reporting to the market if it feels that the revealed info doesn’t adjust to laws. If it finds an issue, the regulator can then write to the group’s chair. Within the case of Wooden, the FRC reviewed its reporting 3 times, two of which led to such a “substantive” trade of letters relating to Wooden’s 2017 and 2022 accounts, in keeping with the regulator’s web site. Wooden got here below specific scrutiny from the FRC for not together with $54.5mn of currency-related modifications in its 2022 “assertion of complete earnings” regardless of the determine being included in a separate assertion that tracks actions in shareholders’ fairness.Wooden acknowledged the error and agreed to restate the assertion of complete earnings, the FRC’s abstract mentioned. It additionally promised to reinforce its disclosures round so-called liquidated damages, in response to a separate FRC criticism the identical yr.In its 2022 annual report, Wooden mentioned the change was “deemed to not be materials by the administrators”. No FRC abstract is out there for the trade over the 2017 accounts.The corporate’s personal annual reviews additionally reveal questions raised by its administrators. The 2023 report particulars that the audit, threat and ethics committee held a overview over an “unsatisfactory group audit and threat report”.The 2022 annual report mentions the identical committee held a “overview with senior enterprise management of an unsatisfactory audit report within the tasks enterprise unit and actions taken”, together with an identical subject within the consulting enterprise unit.Wooden, the FRC and the FCA declined to remark.