Thursday 22 October 2020 4:40 pm

KPMG considering sale of UK restructuring business

KPMG is considering selling its UK restructuring business as the accounting giant looks to shore up its finances after delaying its annual results amid the disruption caused by Covid-19.

The firm is exploring options for the division including a possible sale as the Big Four accountants prepare for extensive reforms of their business to comply with new audit regulations. 

Read more: MPs demand update on audit reform progress from business secretary

A KPMG spokesperson confirmed the talks, news of which was first reported by Sky News.

“We can confirm we are exploring options for our restructuring business. However, we have made no decisions over any eventual outcomes at this stage, and will not comment further at this time,” the spokesperson said.

Some 22 of KPMG’s roughly 600 partners work in its restructuring business, alongside 475 staff members.

The news comes as the Big Four auditors prepare to submit their plans to ensure “operational separation” of their audit and consulting businesses to the accounting watchdog tomorrow. 

The Financial Reporting Council (FRC) ordered the firms to break up their audit divisions from the rest of their business earlier this year amid concerns about companies mixing audit and lucrative consulting work for the same clients. 

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The push to reform the audit sector follows a series of high-profile accounting scandals including the collapses of BHS, Patisserie Valerie, and Carillion – the latter an audit client of KPMG. 

KPMG last week became the second major UK accounting firm to delay publication of its results to give it more time to assess the impact of the coronavirus pandemic on its finances. 

The firm said it would take its performance in the first quarter of the 2021 financial year into account before deciding how to distribute its profits among its partners. 

KPMG had been set to publish its results for the year to September in December. 

In August, PwC became the first Big Four auditor to delay publication of its full-year results in the face of economic uncertainty brought on by the pandemic. The firm is now planning to publish its annual figures in January. 

News that KPMG is considering offloading its restructuring business comes after it emerged the firm was selling its investor consultancy business to asset manager Lazard. 

The Makison Cowell name, a consultancy firm KPMG has owned for seven years, will be transferred to Lazard at the start of December, The Times reported. Details of the deal have not been disclosed.