Westpoint head accuses auditor
A senior Westpoint director has accused auditor KPMG of already knowing about the failed developer’s problems before ticking-off its reports.
Richard Beck, a key capital raiser for Westpoint, said he warned KPMG his company was pooling funds from separate developments into a “common pot”.
Beck’s accusations surfaced publicly in a transcript of an Australian and Securities and Investments Commission interview with him, published in The Australian newspaper this morning.
Beck also told KPMG that he thought Westpoint’s Ann Street Mezzanine fund, one of the first to collapse, was raising more money from investors than it had disclosed.
“The response I received [from KPMG] was that everything was properly accounted for in accordance with Australian accounting standards, and [they issued] unqualified reports,” said Beck.
The fresh accusations against KPMG follow Money Management reporting in February that financial planners were seeking legal advice over the role of the auditors of Westpoint in an attempt to recover client funds.
“From our initial investigations, it appears there have been irregularities in the audit reports produced by KPMG, which have obviously influenced the outcome of financial planners’ decisions, as well as the structure of some of the internal arrangements,” Association of Independently Owned Financial Planners chief executive Peter Johnston said at the time.
When questioned by Money Management, KPMG refuted claims there were irregularities in its audit reports.
A spokesperson said: “In situations where companies face financial concerns, it is common for those impacted to ask questions of various parties.
“KPMG is confident of the quality and veracity of our audit work in relation to various entities in the Westpoint group.”
ASIC, meanwhile, has asked the Federal Court in Perth to appoint receivers to investigate the assets of four directors of Westpoint, including Norman Phillip Carey.
“If a receiver is not appointed then the defendants can still deal with assets and take steps to put them beyond the creditors,” ASIC warned the court.
A spokesperson for lawyers Slater and Gordon, which is preparing a series of court actions against financial planners who sold Westpoint products on behalf of investors, said this morning that any action was still some time away.
“It will take some time to analyse questionnaires we have sent out and received from investors,” the spokesperson said.
Slater and Gordon is looking to recover over $200 million from up to 100 planners on behalf of close to 2,000 clients sold Westpoint products.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
