FRP’s Forensic Services team appointed to investigate the corporate governance in a group of companies

Background

FRP was appointed by an Investigation Committee of a board of an AIM-listed company to conduct an independent investigation into the corporate governance and financial reporting of a group of companies, covering a multi-year period. FRP were instructed to provide an independent, fact-finding report over key areas including related party transactions, commercial relationships, the use of company assets, specific aspects of financial reporting and material disclosures.

Action

FRP deployed a multidisciplinary team of forensic accountants and technology specialists.  FRP’s in-house Forensic Technology team secured over eight million documents within the scope of the investigation. The team utilised RelativityOne, an e-discovery platform, using targeted searches to reduce the focus to approximately 50,000 relevant items for detailed review.

We conducted interviews of company directors and key staff members (both current and historic), while carrying out a high-level examination of the business’ electronic records including an analysis of documents including bank statements, ledgers, and financial reports, assessing their accuracy and completeness to test for the existence of any specific transactions of concern.

FRP’s approach combined flexibility and responsiveness to ensure the efficient and targeted use of resources in a timely manner. Throughout the project, our team maintained clear communication with key stakeholders, including the internal Investigation Committee, auditors, and the AIM nominated advisor, to report progress and significant findings.

Outcome

FRP concluded the initial phase of the investigation and issued its report within 12 weeks.  Our findings on the existence of numerous undisclosed related party transactions and repeated failures in corporate governance, were summarised in an AIM notice. We were instructed to undertake a second phase of the investigation which concluded eight weeks later.