Deloitte facing court after former client reports it to FRC

Thomas reported H20’s former auditor Deloitte to the watchdog following an independent review he commissioned, according to the Financial Times.

He has also reportedly opened up legal proceedings against the firm through legal representatives Keystone Law.

According to the FT, the report provided to the FRC alleges that in its audit of H20 Networks’ 2009 and 2010 accounts, Deloitte missed information that could have uncovered a fraud committed at the company.

H2O, which laid fast fibre-optic broadband cables in Britain’s sewers, collapsed into administration in 2011 after it was found to have taken out loans from Barclays Bank and KBC Lease, through a firm called Total Asset Finance, based on contracts which were inflated in value or did not exist.

Four men, including H2O’s former finance chief Carl Cumiskey, were found guilty of conspiracy to make corrupt payments and conspiracy to commit fraud in 2017 after a Serious Fraud Office probe.

Thomas, 59, was acquitted along with co-defendant Kerry Lloyd and has since commissioned a report into H2O’s books by forensic accountants.

He says this found that Deloitte missed clear warning signs that could have led the fraud to be uncovered sooner.

An FRC spokesperson said the watchdog does not comment on individual companies.

“As with all reports and accounts of companies that fall within the FRC’s remit, if there is evidence to suggest non-compliance or audit failures we would review in accordance with our usual procedures,” they said.

Deloitte declined to comment on the matter.

A spokesperson for Keystone Law said it was investigating the situation and was unable to provide any comment at this stage.