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Wasps' accounting under a cloud as UK's financial regulator presses ahead with formal investigation
Wasps are being investigated by the UK’s financial regulator over whether it misled the market about the state of its finances and how quickly it rectified the matter.
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An in-depth report in the Friday edition of The Financial Times claims that the Financial Conduct Authority’s scrutiny comes after the 152-year old Premiership club admitted to creditors in late 2017 that it had overstated its earnings, breaching covenants on a £35million retail bond, and its auditors, PwC, stepped down after finding “falsified” information.
The FT alleges that a £1.1m capital injection by Derek Richardson, the Irish businessman who owns Wasps and is its chairman, was wrongly stated as income. According to a market announcement made in December 2017, this cut the club’s earnings to £2.4m rather than the £3.5m it first stated.
Proceeds of Wasps’ bond, which is traded on the London Stock Exchange, go partly towards developing the club’s Ricoh stadium in Coventry and refinancing debts. The accuracy and timeliness of statements to the markets made by Wasps’ special purpose vehicle, the issuer of the bonds, are overseen by the FCA.
The newspaper report goes on to state that according to people familiar with the situation, the financial watchdog has opened a formal investigation and is summoning individuals for interviews. The FCA has the power to fine and criminally prosecute breaches of its market-cleanliness rules.
The 152-year old Premiership club admitted to creditors in late 2017 that it had overstated its earnings https://t.co/PcZzEwiToo
— Financial Times (@FinancialTimes) April 12, 2019
Wasps’ overstatement prompted PwC to quit in May, complaining it had been “provided with evidence which our testing revealed to have been falsified” and that “given the seriousness of these events” it no longer felt it “appropriate” to continue in the role, according to a statement filed to Companies House.
A 2018 review by the club found that “a number of items held on the balance sheet could not be substantiated, and the move on to the new accounting system at the end of 2016 resulted in various transactions being recognised in the old system after the statutory accounts had been finalised”. So stated Wasps’ most recent accounts, which were filed in January.
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The FCA and Wasps declined to comment to the FT.
Some of these figures are crazy ? https://t.co/WzSk8g4KGS
— RugbyPass (@RugbyPass) April 9, 2019
Comments on RugbyPass
The movement of quality players back to SA is remarkable.
1 Go to commentsInteresting article, Nic. Am enjoying seeing the Rebels doing well, partly just to spite those who are working to wipe them off the face of the Australian rugby planet. But it is also good to see a team with somany good players beginning fire. LSL has benefitted so much from his move up to Northampton for the one year. I wonder why he did not stay on for another year. Does he now looks north and see his teammates of last year now doing so well, and have some regrets.
44 Go to comments“Over 80% of the World Cup squad are over 30” No it isn’t lol
2 Go to commentsTyrel Lomax the best AB prop since Carl Hayman. Absolutely destroyed the Boks in RWC Final and is monstering allcomers in Super this season. Should be a monster battle vs touring Poms, always deliver a power pack.
1 Go to commentsEye gouging seems like such a strong term for what can only be described as a poke in the eye. When I think of eye gouging I think of someone trying to intentionally pop someone’s eyeball out. it’s like calling a high-tackle attempted decapitation.
3 Go to commentsGreat article. No insights to add, just wanted to say that. :)
1 Go to commentsLeinster are going to win the world cup.
13 Go to commentsSuper Rugby desperately needs to lose at least 2, but up to 4 teams. Rebels quietly going bankrupt would have made that a bit easier. Teams like the Rebels and Force serve only to weaken Australian Rugby and Super Rugby more widely. In 13 years in the comp the Rebels are yet to win more games than they lose in a season, have never finished in the top half of the competition, and have come dead last a number of times. The Western Force, barring a brief stint of mediocrity under John Mitchell from 2007-2009 have been even worse. Sadly it’s hard to see a future for Moana Pasifika in Super Rugby. Likewise I think the writing is on the wall for the Highlanders, it’s hard to see how NZ rugby can continue to support 5 SR teams, and population distribution suggests one team in the south island would make the most sense.
44 Go to commentsNice that Connor Evans is happy to stay on here, that JD Schikerling is returning and Steven Kitshoff. Dobbo is careful to bring back just anybody but having a new financial lease of life, it has made the Stormers a more attractive club. On top of being good quality, having the financial backing helps a lot
1 Go to commentsEngland-qualified too, I believe.
1 Go to commentsThis might turn out to be emblematic of a real issue in Irish rugby. Ireland have one of the best -if not the best - senior sides in the world, and one of the best under 20s sides as well, but don’t seem to be giving graduating under20s players many opportunities to break through into URC starting lineups. There is a risk that a lot of the junior talent they are developing will either be wasted, or lost to other nations.
1 Go to commentsYou ask good questions, Nick. The group who have put together the proposal to play out of Tarneit and participate in the growing of the ground’s capacity are not a bunch of white knights who have been dragged in post-crisis; they were around whilst the Rebels accummulated $23m in debt. Why do we come up with ideas that might make the franchise affordable after it’s broke and not when it might have prevented the trainwreck this offseason was? As for Gordon/Kellaway v Lolesio/Wright, they are both good options. I think the former are better rugby players but the goal kicking of Noah may be decisive when Schmiddy makes his choices. I know Harry Jones has the hots for Edmed but I think it’s one of his few poor choices and he and Jorgensen aren’t close to the other pairs. By coincidence, the wife and I went into town over the weekend to watch Brian Cox and Patricia Clarkson in Long Day’s Journey into Night. Beautifully acted but it was 3.5 hours in the chair and very hard work. Like the Rebels, there were only small bursts of joy to go with a lot of bad news and a depressing story line. In the end, I was hoping it would end and I could give my sore butt a break. Again, familiar.
44 Go to commentsGood decision, very good player but not international quality. But so was Jamison Gibson Park …..
3 Go to commentsLoose forwards always look good going forward and winning. It’s the same loose forwards for the Crusaders and the Canes this year as last year. Too much of the shiny new things getting noticed here while older consistent ones getting bagged. It’s early days. Calm the farm.
6 Go to commentsThanks Nick, and on the money. We tend to be apathetic until something REALLY BAD happens, then we aren't! At least this applies to the Reb players and coach, if not the spectators. They seem to be getting very quick ball at times. Have they altered something, or is it just all of the skills coming together at the right time? It seems almost the opposite of the Reds, who started the season with quick ball, but haven't been showing that in the last 3 losing games. Is it attitude (McDermott hasn't looked “right” to me for 3 weeks), or something else?
44 Go to commentsGood summary. As said, Sevu Reece has been electrifying for the Crusaders. Great try and he has been everywhere. Amazing he is now equal with Caleb Ralph , club record of 52 tries for the Crusaders. That record beckons. Good to see Dallas McLeod getting regular starts at last. A big few weeks are ahead.
6 Go to commentsGood article/interview.As was said Christian Lio-Willie was barnstorming when he came on for the Crusaders. What happened at the end, self-explanatory.Captain fantastic Scott Barrett is due back soon as well, once they are back from Aussie. Great to see Ethan Blackadder back last week.
1 Go to commentsYou must have been watching one team, Andrew - and even then you missed the brightest star in the Chiefs pack - Naitoa Ah Kuoi, 2 turnovers, genuine line-out presence and grunt around the field, and the soft hands of a back.
6 Go to commentsHaha what a crock of sh!t these headlines are. Moorby’s best year was that first. Still doesn’t seem to have the same game about him as when he was fresh but has bounced back well this season to be playing consistent tight accurate footy
3 Go to commentsIt’s even dumber than Bernard Foley not kicking the penalty to touch in the Melbourne Bledisloe in 2022.
3 Go to comments