Regulator launches Studio Retail audit probe
Financial statements for the 2020/21 year from Studio Retail are being investigated by industry watchdog the Financial Reporting Council (FRC).
The audit of the group’s finances was conducted by global accountancy firm Mazars and the FRC action refers to statements for the “period ending 26 March 2021” well before Frasers Group made its successful bid for the online retailer.
The FRC also said the investigation "does not relate to any persons other than the relevant Statutory Auditor(s) and it would not be fair to treat any part of this announcement as constituting or evidencing an investigation into any other persons or entities".
The business, which was bought out of administration by Frasers Group in February 2022, had failed owing more than £80 million. Frasers bought the firm for just £1 as well as the release of £53.1 million of secured liabilities under its revolving credit facility and ancillary facilities. It then acquired Studio Retail Group's secured lenders' claims against it for around £26.8 million.
Mazars said “it can confirm that the FRC has commenced an investigation in relation to the audit of Studio Retail Group plc for the period to 26 March 2021. Mazars is cooperating fully with the regulator and, respecting client confidentiality and due process, will provide no further comment during the course of the investigation.”
Frasers, which originally had a 30% stake in Studio Retail and stepped in to buy the business to secure its interest, has yet to comment on the FRC involvement.
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