Sir Philip Green’s legal challenge with FRC over PwC’s BHS audit starts today

Sir Philip Green BHS audit

Sir Philip Green will today seek a judicial review of a report on PwC’s audit of BHS, effectively launching his court battle with the Financial Reporting Council (FRC).

The news comes after the FRC last week handed BHS’s former accountancy firm PwC a £10 million fine for its an audit of BHS, when it gave it a clean bill of health for the year ending August 30, 2014.

PwC audit partner Steve Denison also signed off the BHS accounts as a “going concern” days before Green sold it to former bankrupt Dominic Chappell for just £1 in March 2015 PwC stepped down as BHS’s auditor after the sale.

The FRC also issued Denison a £325,000 fine and he has voluntarily given an undertaking to remove his name from the register of statutory auditors.

Meanwhille, PwC’s historic fine has been reduced to £6.5 million for early settlement.

However, the FRC has not yet detailed why it has sanctioned PwC, drawing criticism from MPs.

Green’s holding company Taveta Investments is now seeking a judicial review of the FRC’s report, with the first hearing of the case taking place in the High Court today.

He is reportedly pressing the FRC to change certain aspects of the report, believing it could expose his business dealings in relation to BHS.

When BHS collapsed 13 months after Chappell acquired it, it left behind a £571 million pensions black whole which affected 22,000 employees and former employees, triggering a parliamentary inquiry spearheaded by Frank Field MP.

Field, who been in a long-running and very public feud with Green since the BHS collapse, has been pressing the FRC to reveal Green’s demands, and to publish its findings on the discredited audit.

Field also wrote to both PwC and Denison on Wednesday to ask for details about the audit.

Additionally, he has asked PwC how many staff members worked on the audit, and whether any staff engaged in the work provided any other services to Green’s Taveta group.

On the other hand, Chappell is also considering legal action over PwC’s discredited audit of BHS, and is reportedly investigating whether he can take action against those involved in the audit.

The FRC has said it would publish its full reports soon as possible, but cautioned that it was subject to legal proceedings.

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