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BDO steps down as Harlequin auditor

3rd Apr 2013
Freelance journalist
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The Caribbean investment firm at the centre of a Serious Fraud Office investigation, Harlequin Property, has lost its second auditor in less than three years.

Mid-tier firm BDO filed a public resignation at Companies House saying it can no longer act as auditor for the company, the Basildon Echo reported.

BDO declined to comment to AccountingWEB.

Harlequin is being investigated by the fraud office and Essex Police, following complaints from investors over delays, the Echo reported.

In a statement to Accounting WEB Harlequin said it has not appointed a replacement for BDO yet and does not have to do so for some months to comply with its statutory duties.

“Unfortunately, the issues that Harlequin has worked diligently to correct are due largely to historic problems with its former accountants and UK auditors, Wilkins Kennedy, who are now the subject of a claim by Harlequin for professional negligence in relation to aspects of the work they did for Harlequin over several years.”

In February, Wilkins Kennedy told AccountingWEB that it was “robustly defending” the claims against it.

BDO audited Harlequin’s last accounts up to March 2011, but issued a disclaimer saying it had not seen enough evidence to ensure they were accurate.

Its resignation letter quoted by the Echo said: “We have not been given significant information by the directors to enable us to ascertain whether or not appropriate progress has been made.”

It added that in light of the lack of communication, which it said was needed for an effective audit, it “had resigned as auditor”.

Harlequin’s previous auditor Wilkins Kennedy resigned in summer 2010 saying information had come to light which made it inappropriate to stay in office.

Harlequin blamed Wilkins Kennedy for failings in its accounts records and launched a professional negligence claim against the Southend accountants.

It is not known who the new auditor is, but accountant James Baker, of the Baker
Clarke Partnership, in Tolleshunt Major, recently conducted a "forensic review" of its accounts and said all investors' money was accounted for, the Echo said.

In February, City watchdog the Financial Services Authority (FSA), issued an “alert” warning financial advisers carry out thorough due diligence before clients invest with Harlequin Management Services (South East) Limited (Harlequin).

The alert, directed at regulated firms and not at Harlequin, said advisers should consider how building work is progressing on the various sites, establish how funds will be used and make a full assessment of all publicly available information about the overseas property investments through Harlequin, and on all the parties associated with these investments.

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