The crisis surrounding Metamorph Group took another twist today as it emerged that auditors had resigned over disclosure and management issues.
According to a Companies House update, Crowe UK LLP formally resigned last month as auditor for Metamorph Group Limited. The accountancy firm also resigned as auditor for MLL Ltd and Beaumont ABS Ltd at the same time (both of these firms were subject to SRA intervention in the last week to protect client interests) as well as Parrott & Coales, which is not subject to intervention.
In its resignation letter, Crowe said that in accordance with its statutory obligations, it should bring certain matters to the attention of members and creditors.
The firm said it was resigning ‘because we have been unable to obtain sufficient appropriate audit evidence to resolve serious concerns’ identified during its audit of the financial statements for the year ended 30 June 2021. These accounts were due to be filed by June this year but remain unpublished.
Crowe said: ‘That audit had not been completed and, despite repeated requests, the company has failed to provide information and explanations sufficient to address our concerns. In addition, we have concerns around management’s behaviour in terms of their approach to compliance with law and regulations.
‘The failure of management to provide the requested information coupled with our concerns around management behaviour means the relationship between the company and ourselves as auditors has broken down, and given the significance of these matters we have concluded that we cannot continue as auditors.’
Meanwhile, it also emerged from Companies House updates that solicitor Simon Goldhill, who founded Metamorph in 2015 with a plan to acquire existing firms, resigned on 10 December as director of Metamorph Group. Fellow directors Shaun Dixon and David Whitlock also had their appointments terminated. The only active director remaining with the company is executive chairman Tony Stockdale.
The SRA is now handling the affairs of all Metamorph firms except Browns, Beeton Edwards and Parrott & Coales. It intervened into four firms last week, including MLL Ltd, and on Monday similarly shut down Knowles Benning and Knight Polson.
The group once had around 650 people working at its network of practices but many have been made redundant in recent months and an unknown number of staff who have not been paid since October are effectively out of work since the closure of their firms.
