A FTSE SMALL CAP Company Secretary writes...
An outgoing auditor of a listed company (a Public Interest Entity for this purpose) is insisting on a s519 statement being sent to all shareholders with the reason for the change being due to a competitive tender. Have other companies got round this, i.e. by agreeing that the auditors include the usual wording about nothing of concern to shareholders and creditors as well. Otherwise if the company does nothing the auditors can file the statement at Companies House after 21 days. Have any companies taken that route?
We have had clients who have been through similar experiences. In one case (AIM Company), the company printed and posted a copy of the 519 letter to all shareholders irrespective of their communication preference. The reason for this was that eComms attaching documents could potentially cause a Spam issue.
In addition, they also attached a in the RNS communication that took readers to a copy of the letter on the company website.
The company also filed a copy of the exiting statement and shareholder communication with the FRC, which can be done by email to: auditorsresignation@frc.org.uk . And, don’t forget the exiting auditor should also make their filing at Companies House.
Hope this helps – good luck!
I cannot recall the exact detail but in a previous company I worked for we included the letter from the auditor in the notice of AGM. See example here: https://www.firstgroupplc.com/~/media/Files/F/Firstgroup-Plc/AGM/2020/notice-of-annual-general-meeting-2020.pdf
Hard to understand why the auditors are taking this approach. They’re obliged to send a statement to the company, but it’s hard to understand why they think losing a competitive tender process is a matter of concern. When this happened with our auditors (one of the Big 4) I had to remind them that they needed to send a statement to the company! apart from telling the auditors not to be so stupid, you could say you’ll apply to the court under section 420 for an order that you do not need to circulate to shareholders and see if they back off?