Steely resolve or delaying tactics?

Sarah Healey Pearce, Director at Scrutton Bland mulls over the practice of the delayed filing of accounts.

Last weekend The Sunday Times reported on steel magnate Sanjeev Gupta delaying the filing of 20 subsidiary year end accounts by changing the year end by just 1 day and taking advantage of getting an additional 3 months to file, avoiding a filing penalty. A seemingly clever move by his advisers.

Whilst there is no hint of foul play involved, this action has followed stories before Christmas that suppliers weren’t being paid and therefore the delay with filing accounts has only served to add fuel to the fire that all is not well within the group, naturally.

The group made several acquisitions last year and a statement on the Gupta Family Group Alliance website suggests that the accounting functions of the different entities are simply under pressure. This is entirely normal when companies are acquired as sometimes, even with the most comprehensive due diligence, issues after completion can develop.

However, a large scale filing delay certainly suggests that there are some deep rooted issues and one can’t help but conclude that someone doesn’t want this information to be made public for fear of the potential commercial ramifications. How this kind of action looks to stakeholders is definitely worth considering and I for one will be keeping an eye out to see what finally gets filed on the public register.

Sarah regularly advises businesses on their accounting and audit needs. To get in touch with her please call 0330 058 6559.

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Sarah is a Director in our Corporate Finance and Business Advisory teams, regularly advising clients on transactions. To get in touch with her please call 0330 058 6559.
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