MJ Hudson: EY quits after it ‘lost trust and confidence’ in firm’s top brass

CHRIS DORRELL AND LOUIS GOSS

EY HAS resigned as MJ Hudson’s auditor after losing trust in the company’s ability to “provide us with accurate and reliable information for audit”.

The embattled asset manager received the news in a letter from the Big Four accountancy firm yesterday in which EY said it would be resigning with immediate effect.

In its letter to MJ Hudson, EY said:

“We are ceasing to hold office because we have lost trust and confidence in the company’s management and those charged with governance, and in their ability, along with your finance team, to provide us with accurate and reliable information for audit”.

MJ Hudson said it continues to work with an external firm to allow accurate financial reports for 2022 to be completed.

MJ Hudson’s shares were suspended in December last year after it reported “issues” around historical trading reports. By then it had already lost around three quarters of its value since its IPO in December 2019.

One audit partner at a leading accounting firm told City A.M. that the decision shows the Big Four firm thinks working with MJ Hudson is not worth the risk.

The industry source noted that the world’s largest auditors are increasingly de-risking their portfolios by dropping clients due to concerns over the prospect of hefty fines from audit regulators.

Top audit firms, the source added, are also becoming more concerned about the reputational impacts of working with poorly run businesses.

EY’s decision to drop MJ Hudson as a client comes as the firm continues to fight a series of lawsuits over its auditing role in a number of high-profile corporate scandals, including German payments processor Wirecard and UAE healthcare firm NMC Health.