Deloitte has announced it is resigning as auditor of Swiss-based mining company Ferrexpo with immediate effect.
Deloitte said the reasons for its resignation was due to the company’s delay in commencing its independent review into the possible misappropriation of funds by charitable foundation Blooming Land.
According to the Financial Times, Deloitte said the “delay in conducting an independent forensic investigation” was “incompatible with [its] continuing in the role of statutory auditor beyond the 2018 financial year”.
However, in response, Ferexpo said it initiated the formal independent review at the “appropriate time”, given the other steps it was taking and all the “surrounding circumstances.”
Steve Lucas, chairman of Ferrexpo, said: “The board of Ferrexpo is committed to the highest levels of corporate governance and transparency. We are naturally disappointed by Deloitte’s resignation and its reasons, as well as the resignation of Ms Reilly and Mr Nacken.
“We have commenced a process to appoint new auditors and additional independent non-executive directors. We are also committed to completing the independent review into Blooming Land as quickly as possible and will update shareholders on the outcome in due course.”
He added: “As reported in the Group’s 2018 full year results announcement, at this stage we cannot conclude as to the ultimate use of all of the funds by the charity. While there are indications that some funds could have been misappropriated, further work is required before any final conclusions can be drawn and the Board would like to make clear that to date no conclusive evidence of misappropriation of funds has come to light. ”