Quindell shares sink as stock trading resumes

on Aug 6, 2015

Quindell Plc’s (LON:QPP) stock plummeted more than 30 percent today, following the lifting of a trading suspension which had been in place since June 29.

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As of 08:04 BST Quindell’s share price was 31.86 percent in the red at 85.00p.
The resumption of stock trading comes at a very sensitive moment for the company, as yesterday the UK Serious Fraud Office (SFO) announced that it had opened a criminal investigation into accounting practices at Quindell, following the company’s re-statement of 2013 and 2014 full year results which revealed massively overstated profits.
The Financial Reporting Council also said it would be investigating the firm, while the UK’s top financial watchdog, the Financial Conduct Authority, has been conducting its own inquiry into Quindell’s books for several months now.

Quindell said it would fully co-operate with authorities on the matter.
An internal review by the company revealed accounting policies that were “at the aggressive end of acceptable practice”. These policies helped it present significant financial losses as sizable profits for the last two years. In 2013, Quindell reported a profit of £107 million, but yesterday’s recalculations revealed that the company was in fact £64 million in the red, while last year’s recorded £96 million loss was reassessed as a loss of £282 million.
During the last two years the company was run by its founder Rob Terry, who stepped down in November.
Quindell was previously amongst the biggest companies listed on the London Stock Exchange’s junior market, the Alternative Investment Market. As rumours of accounting irregularities emerged last year, however, the company came under relentless attack from short sellers, and its stock has since sank more than 80 percent.
Consequently, this year the company had to sell its largest unit, the professional services division, to Australian rival Slater and Gordon Limited for £637 million in order to stay afloat.


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