Tuesday 27 April 2021 12:46 pm

EY quits as auditor of P2P lender Kuflink over governance concerns

EY has resigned as auditor of peer-to-peer lender Kuflink after finding a litany of problems at the group, including worries about its general oversight.

The Big Four firm stepped down as auditor on 16 February, according to a letter on Companies House, which said Kuflink had “significant work” to do on multiple aspects of its business, including on record keeping.

Read more: Big Four and challengers ask for leeway on difficult audits to avoid public criticism

“We believe the controls present; the level of governance evidenced; the level of record-keeping and the general oversight of the business are currently inadequate and require significant work to improve them,” the letter said.

Narinder Khattoare, Kuflink’s chief executive said the business had “successfully worked through” many issues raised by EY, with others “still being addressed” in collaboration with new auditors at MHA MacIntyre Hudson.

He added that none of the issues “have or would have compromised any investor funds”, and that the company had been working through its issues in September 2020 with the new auditors.

He said the business was in a strong position, adding that it was approaching breakeven and that £73m in capital and interest had been returned to investors.

Read more: UK audit shakeup: Big Four face FTSE client caps, new watchdog and a clampdown on directors

Khattoare said that a £454,000 VAT liability, incurred after the company mistakenly failed to register to collect the tax on intercompany fees, would be settled by a June deadline set by HM Revenue & Customs.

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