The Financial Conduct Authority has launched an investigation into Quindell PLC’s public statements regarding its financial accounts, dealing another blow to the beleaguered technology and outsourcing company.
The insurance and personal injury claims processor has had a tumultuous year during which it has wrestled with questions over its revenue model and profit quality and seen its chairman quit over a stock deal.
Trading in shares in the company, once one of the biggest on London’s junior Alternative Investment Market (AIM), was halted on Wednesday morning.
The FCA said it has begun an investigation under the Financial Services and Markets Act 2000 into statements related to its accounts for 2013 and 2014.
The FCA did not provide any further details, but said it would work with other agencies regarding the probe.
Quindell said in a statement it will fully cooperate with the investigation.
The company’s stock has lost more than three-quarters of its value since its troubles began in April 2014.
It recently sold its professional services division to Australian law firm Slater & Gordon Ltd for £588m.
An independent review by PwC in December found some of the accounting policies were “largely acceptable but were at the aggressive end of acceptable practice.”
Quindell said it will adopt a more conservative and appropriate approach to the recognition of revenues and profits in its now sold professional services division.
The company said it expects its shares to resume trading “as soon as practicable” and no later than the publication of its 2014 results, due at the end of June.