Financial watchdog to investigate M&C Saatchi accounting scandal
The UK financial watchdog has launched an investigation into M&C Saatchi after the advertising agency revealed an accounting scandal last year.
The company told investors that the Financial Conduct Authority (FCA) will probe the £11.6 million accounting error it revealed in December.
The inquiry also follows the completion of an independent forensic review commissioned by the agency’s board.
M&C Saatchi’s shares imploded after the accounting blunder was revealed, with the firm also issuing a profit warning on the same day.
It admitted that earnings could fall 27% below the level it hit in 2018, in its second profit warning over a three-month period.
Separately, it said PwC had identified that its 2018 half-year profits were overstated by around £6 million.
Four bosses at the advertising giant – Lord Maurice Saatchi, who launched the business with his brother Charles in 1995, and fellow directors Lord Dobbs, Sir Michael Peat and Lorna Tilbian – later quit the firm.
In a brief statement on Friday, M&C Saatchi said: “The Financial Conduct Authority has notified M&C Saatchi plc that it has commenced an investigation following the accounting adjustments announced by the company, most recently on December 4 2019, and following the completion of an independent forensic review commissioned by the board.
“The company will co-operate fully with the FCA.”
Shares in the company dived 10.4% to 99p in early trading on Friday.