GFG Alliance King & King More Questions

 

Some additional investigation on King & King via another electronic visit to Companies House.  A closer look at two GFG Alliance companies audited by K&K.

SUMMARY

Findings

1. K&K and its associates received at least GBP 124,111 in audit fees for three years audit work between 2018-2020. (this post)

2. As noted in my earlier post, of the K&K companies I was able to identify two were dormant and one had net assets of GBP 685. (previous post)

3. A related company, Relans, had a larger balance sheet. (previous post)

Unanswered Questions

1. Is there another K&K entity that received the fees? If so, what is it?

2. Who are the “associates” who receive a part of the audit fees?

3. What was their role? Did K&K employ outside personnel to conduct the audits? Or subcontract some of its work to another firm?

DETAILS

LIBERTY STEEL GROUP HOLDINGS UK LTD Company number 10702565

40 Grosvenor Place, 2nd Floor, London, United Kingdom, SW1X 7GG

Here’s the link to LSGH’s filings with Companies House, including its financial statements. Please refer to that link for copies of the financials.

King and King acted as statutory auditor on the LSGH’s annual reports for 31 March 2020 (auditor signed 26 February 2021) and 2019 (auditor signed 12 September 2019)

HW Fisher and Company acted as auditor on the 31 March 2018 annual reports.

According to Note 3 to the 2020 financials, the auditors fees of GBP 17,600 for 2020 and GBP 16,000 for 2019 “is borne by a subsidiary of the company.”

Also note it states that the “audit fees were paid to the auditors and associates”.

Unclear what that means.

Who are the associates? What was their role? How much did they get?

Looking at the 31 March 2018 audited financials (signed by HW Fisher on 30 November 2018), note #3 says that “audit costs were borne by Liberty Pipes Hartpool”. No amount disclosed.

That leads us to a look at:

LIBERTY PIPES (HARTLEPOOL) LIMITED Company number 09931472

40 Grosvenor Place, 2nd Floor, London, United Kingdom, SW1X 7GG

Here’s the link to LPH’s filings at Companies House.

K&K has been the auditor for this company since 2018. 

Prior to that the company filed micro accounts for 2016 and extended its 2017 fiscal year to 31 March 2018.

For fiscal 2018 (auditor’s report dated 8 Feb 2019) and 2019 (auditor’s report dated 22 Nov 2019) , the company paid its auditor King & King GBP 24,500 (each year). In these two years, the term “auditor and its associates” is used.

For fiscal 2020 (auditor’s report dated 18 Dec 2020), it paid GBP 75,111 (note #4). No mention of associates of auditor.

If we assume that LPH has continued to pay the audit fee for LSGH (and therefore those fees are included in the amounts in LPH’s financials), King & King and “associates” has received at least audit fees of GBP 124,111.

The question is what K&K entity received payment.

A few other items from the financials.

1. LSGH has a recurring loss of GBP 60,000 a year for the past two fiscal years.

2. LSGH has 15 subsidiaries.

3. LPH eked out a modest GP 395,995 profit in FYE 2020 following total losses of some GBP 5,159,917 the prior two fiscal years.