More bad news for Slater & Gordon as Australian authorities launch “falsified” accounts probe

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Australia: two notices served

The Australian Securities and Investment Commission (ASIC) has launched an investigation into whether Slater & Gordon’s accounts have been falsified, it emerged last night.

The listed firm told the Australian Stock Exchange that yesterday afternoon ASIC served it with two notices to produce documents relating to an investigation into the accuracy of its financial records and accounts for the period between 1 December 2014 and 29 September 2015.

“In particular, the ASIC investigation seeks to determine whether those financial records and accounts were deliberately falsified or manipulated and whether the company or any of its officers have committed offences.

“ASIC has stated that these notices should not be construed as an indication by ASIC that a contravention of the law has occurred and nor should they be considered a reflection upon any person or entity.

“The company will comply with the notices and will also fully co-operate with ASIC so that its investigation may be completed as soon as reasonably possible.”

Slater & Gordon’s share price fell 7.5% to 24c – close to its all-time low of 22c from earlier this year. In April 2015 they topped A$8.

It is the second time the ASIC has investigated Slater & Gordon. Last year it started an inquiry into certain matters arising from the financial reports for the 2014 and 2015 financial years, but the firm confirmed at the start of 2016 that this has been discontinued in light of a goodwill write-down and other accounting measures taken.

Ever since buying Quindell’s professional services division in May 2015 Slater & Gordon has been on the wrong side of the headlines and seen its share price fall and fall.

At the start of 2016 it announced huge losses as a result of the goodwill write-down and has had to restructure its UK arm – closing offices and making redundancies along the way – but says this is bearing fruit. It is also facing shareholder class actions in Australia. In turn, Slater & Gordon is suing Quindell, or Watchstone Group as it is now called.