View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
February 2, 2011

KPMG Australia to pay A$60m plus in Westpoint settlement

KPMG Australia is to pay more than A$60million
($60.8million) in compensation to investors of Westpoint Group, as
part of a settlement reached with the Australian Securities and
Investment Commission (ASIC).

The exact amount to be paid by KPMG has not
been disclosed by the ASIC or KPMG, but Australian news reports
claim the Big Four firm is to pay the majority of the
A$67.45million settlement.

In 2008 KPMG was sued by the ASIC for A$200
million for alleged negligent conduct in its audit of several
Westpoint companies for the years ended 30 June 2002, 2003 and
2004.

ASIC banned three KPMG audit partners from
practicing as registered auditors for the period between nine
months and two years for their role in the audit of Westpoint
Group.

KPMG then lodged a claim against ASIC,
challenging the constitutional right of the ASIC to launch the
A$200 million claim on behalf of investors in 2010.

The A$67.45million settlement brings all the
proceedings to an end.

ASIC’s chairman Tony D’Aloisio said this
settlement will avoid the delays associated with conducting the
proceedings through to a trial in September 2011 and provide an
additional return for investors in the plaintiff mezzanine
companies who lost money as a result of the collapse of the group
in 2005.

“A confidential commercial resolution is,
because of the age and circumstances of the investors, the
preferred resolution in a case such as this where litigation can
take years,” D’Aloisio said.

KPMG said in a statement that the firm has
co-operated fully with ASIC during its investigation into the
Westpoint collapse. “We share ASIC’s view that the resolution of
the proceedings has been achieved in a constructive manner,” the
firm said.

KPMG is Australia’s second largest accounting
firm and has a reported revenue of A$958 million in the year to 30
June 2010.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to International Accounting Bulletin