Quindell has requested temporary suspension from Aim, and is being investigated by the FCA, after admitting some of its practices were “at the aggressive end of acceptable”.
The Financial Conduct Authority confirmed it had begun an investigation into public statements made regarding Quindell’s financial accounts during 2013 and 2014. The City watchdog would be liaising with other agencies “as appropriate”.
It declined to comment further. Quindell said it would fully comply with the investigation.
PwC, which had been brought on to carry out an independent review, concured with Quindell that “certain policies were not appropriate, principally those relating to the noise induced hearing loss cases revenue and related balances that became significant during 2014”, the insurance claims processor said in a statement.
This part of the business is being treated as a discontinued operation, meaning that changes to its accounting policies were “largely of historical interest only”,
“Nevertheless, the changes will be to adopt a more conservative and appropriate approach to the recognition of revenues and profits in the PSD,” it said.
“The impact of these changes will materially impact previously reported results for the year ended 31 December 2013 and the six months ended 30 June 2014.”
Quindell said it expects trading to resume “as soon as practicable” and no later than publication of its 2014 financial statements.
Quindell has started another review, along with its auditors, into its historic transactions and acquisitions, which it will reveal shortly “with a view to ensuring that more complete information is available in respect of the historical position; to ensure that any related party transactions are fully disclosed; and make associated corrections”.
“These matters are largely non-cash items and the board will make clear the outcome of this work and will provide further information in the company's report and accounts for FY 2014,” Quindell said.
The move prompted Augustin Eden, analyst at Accendo Markets, to put out a note on what he dubbed "the comedy show that is Quindell".
He wrote: "It’s the latest chapter in a story our most creative writers would be at pains to compose as, once again, the accounting methods of the golf club operator turned insurance claims outsourcer are called into question – in particular those employed under ambitious and eccentric founder Rob Terry in early 2013.
"Assuming Quindell is viewing its own behaviour through somewhat rose-tinted specs, I wouldn’t even attempt to imagine what the FCA might find. You wouldn’t be able to make it up."