It’s been a while since we last checked out Solutions 30, the Paris-listed men’s sub-contractor in a van who has spent the past six months battling various serious allegations of short sellers.
It is a tale with many ripples that, to save word count, we will not repeat in detail. (You can catch up on this global FT Alphaville investigation here.) But the latest news from Solutions 30 was that it was looking to replace its auditor, EY, after the company refused to sign its annual accounts for 2020, citing problems with various related party transactions.
Well, Monday we updated. As a result of what we imagine to be a very competitive bidding process involving the other three members of the Big Four and other audit firms, its new auditor, subject to shareholder approval, is. . . PKF Audit & Consulting. No, neither do we.
Of Press release:
The Management Board of Solutions 30, with the approval of the Audit Committee, at its meeting of June 25, 2021, decided to submit to the vote of the General Meeting of Shareholders of June 30, 2021, a resolution appointing PKF Audit & Conseil Luxembourg as statutory auditor, succeeding EY, whose mandate will expire on that date. The call for tenders which has just been completed resulted in the selection of PKF Audit & Conseil and will be proposed to Solutions 30 shareholders for approval. At the end of the call for tenders process, the PKF Audit & Conseil teams presented the best technical offer and demonstrated their ability to audit the accounts of Solutions 30 and its subsidiaries in accordance with the standards in force.
So who is PKF? Well, according to his website, the firm ranked 15th in the International Accounting Bulletin list in 2020 and has 220 member firms in 150 countries. So he’s not exactly a small player.
However, the Luxembourg office is quite green. The company was only established in 2018 and has only two partners, with the rest of the staff totaling just eight people, according to a rapid workforce of its employees listed on LinkedIn and his local website. But it appears to have carried out notable audits so far, including the accounts of the consumer credit group 4finance. This allowed PKF to make a small profit in its second year of activity, according to the accounts consulted from the Luxembourg commercial register.
But whether a clean PKF audit is sufficient to restore Solutions 30’s beleaguered reputation with institutional investors is another matter. According to the French research house IDMidCaps, only one in 20 of the SBF 120 – the French average values ââindex – has its accounts audited by a firm outside the âBig Fiveâ (the usual four, more BDO). So the news might not be exactly the confidence boost fund houses will be looking for. Particularly if the question mark over the exact problems EY was having with the company’s accounts persists. (Tips, of course, welcome by email.)
Still, some investors seem happy. Solutions 30 stock climbed 10 percent on the news Monday to â¬ 5.40, although it sold a little on Tuesday morning to settle around â¬ 5.11. It looks like it will take a lot more than a signature from a second-tier audit firm to bring the stock back to its December highs of just under â¬ 20.
Solutions 30: from Romania to Mauritius, with love – FT Alphaville
Solutions 30: a question mark of â¬ 1.1 billion – FT Alphaville
Solutions 30 and the endangered audit letter – FT Alphaville
Solutions 30 stock craters after EY refuses to sign accounts – FT Alphaville
Solutions 30: suspended in animation – FT Alphaville
Oddo calls for an independent audit at Solutions 30 – FT Alphaville
Solutions 30 suspends actions after Muddy Waters joins fray – FT Alphaville
Solutions 30 drops one-fifth on news of unpublished short report – FT Alphaville