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April 29, 2012

KPMG could face probe over HBOS work

KPMG UK has been referred to the UK Financial Reporting Council (FRC) over its work at HBOS leading up to the bank’s bailout. KPMG audited and produced special reports for HBOS.

A complaint has been filed by HBOS former head of risk turned whistleblower Paul Moore.

Moore, a former KPMG partner, said he was sacked by former HBOS chief executive James Crosby following his warning that the bank’s lending policy had become dangerously overheated, according to The Telegraph.

But in a 2005 report, KPMG’s forensic team stated Moore was fired because of alleged personality clashes.

Moore is understood to have contacted KPMG chairman and senior partner John Griffith-Jones to request an apology for KPMG’s role in the investigation of his sacking, The Telegraph said. Moore is believed to have requested KPMG donate to charity fees paid to it for its part in the investigation.

KPMG released a statement defending the “quality of our work at HBOS”.

The FRC declined to comment on the complaint.

The complaint comes a week after former head of HBOS’s corporate bank, Peter Cummings, was handed down a seven-figure fine by the Financial Services Authority for his part in the collapse of the bank. Cummings is contesting the fine.



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