The Financial Reporting Council has today published its annual inspection and supervision results for the seven largest audit firms (BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars and PwC): see here. Three quarters of audits have been rated good or requiring limited improvement; however, at two audit firms - Mazars and BDO - the results are described as unacceptable (half of the audits reviewed at Mazars, and five of the twelve reviewed at BDO, requiring more than limited improvement).
The UK Secondary Capital Raising Review, which launched last October, has today published its report and recommendations: see here (pdf). A summary is available here. The Financial Conduct Authority has welcomed the report: see here.
Judgment was delivered today by Mrs Justice Cockerill in Kelly v Baker and Braid [2022] EWHC 1879 (Comm). The case is interesting because of the circumstances in which the trial judge was required to consider whether fiduciary duties were owed to a shareholder (Mr Kelly) by those who had led a management buy-out (Mr Baker and Mr Braid).
Mr Kelly argued that Mr Baker and Mr Braid (who had worked in, or for, various family companies over the years) had failed to inform him that the transaction - the sale of two family businesses for £100 million - was a management buy-out. Mr Kelly argued that he trusted Mr Baker and Mr Braid implicitly and that they were in a position of trust because of the nature of their relationship with the Kelly family. The trial judge found that no fiduciary relationship existed and observed (at para. [80]):
...there is no set of circumstances remotely akin to the quasi-familial closeness which in some of the cases has been found to exceptionally create a fiduciary relationship. Further I note that even if such a relationship of closeness had been made out that would not have created a fiduciary relationship as regards this particular transaction – here one must have in mind the dicta in such cases as Vald Nielsen (at [744]) as regards the scope of the duty."
The OECD held a Corporate Governance Forum yesterday. The day provided an opportunity for many things including an update on the OECD's review of the G20/OECD Principles of Corporate Governance. The update was provided by the Chair of the OECD's Corporate Governance Committee, Mr. Masato Kanda. His contribution to the day begins, in the below recording, at the 1hr10 mark. The day's agenda and other materials can be found here.
Several recent publications from The Basel Committee on Banking Supervision to note: (a) a consultation paper on the prudential treatment of banks' cryptoasset exposures; (b) some high level considerations on proportionality; and (c) principles for the effective management and supervision of climate-related financial risks (including those relating to corporate governance, internal control and risk assessment).
