Big Four firm refuses to audit Hipgnosis Songs Fund accounts
One of the Big Four firms has refused to audit the accounts of a listed music investment company, Hipgnosis Songs Fund, as the troubled company continues to battle.
In a company update today, Hipgnosis Songs Fund said it is currently undertaking an audit tender process for the 31 March 2024 audit. However, PwC have indicated they will not be participating in the tender.
The move now forces the company to find a new auditor, which it said will confirm in due course.
Last month the board decided to conduct a “strategic review” which will look at different management options as it tries to appease shareholders.
However, shareholders went against board recommendations with over 83 per cent voting ‘no’ to a continuation at a general meeting in late October. The shareholders also voted for chairman Andrew Sutch to go, with 71.5 per cent votes filed against him.
Earlier this month the company shook up its management team to add Robert Naylor as chair of the board and Francis Keeling as non-executive director.
Today, the board update focused on this “strategic review”, highlighting that it intends to appoint independent advisers to conduct due diligence on the company’s assets. The board said that completion of this due diligence “will provide a strong knowledge base” so the board can bring forward alternative proposals for the future of the company.
The board also provided an update on its legal proceedings against its founder Merck Mercuriadis, which was filed to the English High Court in June.
It said: “In summary, Hipgnosis Music alleges a diversion of business opportunity from Hipgnosis Music (of which Mercuriadis was previously a director) to the company and the investment adviser and also alleges that the company unlawfully assisted Mercuriadis with, or received, this alleged diversion.”
It highlighted that Mercuriadis denies the claims and “intends to vigorously defend them”. The group noted that it is not insured as to the costs of dealing with this claim
Hipgnosis Songs Fund share was trading at 72.9p per share yesterday.