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Has Paul Murray failed the transparency test?

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Dave King With the clock racing towards Sevco being permanently kicked off the Alternative Investment Market it seems that Paul Murray’s transparency pledge may have stopped.

Swept to power alongside Dave King at the start of March, transparency and accountability were the watchwords of the new regime, as a brave new dawn cracked open over Ibrox.

Mr King’s promise of immediately appointing a new NOMAD looks like falling by the wayside as the warning issued by a South African judge that he is a glib and shameless liar come home to roost.

More worrying for Sevco shareholders is Mr Murray’s account of when and why respected auditors Deloitte walked away from a highly lucrative client.

Yesterday Mr Murray, known as pot-less outside of the marble staircase, stated: “I have been informed by Deloitte, the existing auditor, that they informed the previous Board of their intention to resign following the June 2014 audit. The previous Board chose not to announce this nor did they find a replacement for Deloitte.

With limited time to have these results reviewed the Board asked Jeffreys Henry to perform the exercise as Independent Reporting Accountants, not auditors. They have previously carried out work for the Club and therefore know the finance functions well. The Board will make a further announcement on this subject once we have found a replacement firm for Deloitte.”

As Mr Murray, a respected banker apparently, knows fine well auditors to public companies don’t just walk away. They have a duty to inform shareholders of their reasons for walking away.

Being typically vague with detail the current Sevco chairman claimed that he was informed by Deloitte that they intended to resign following the June 2014.

That ‘intention’ hadn’t been completed by December 2014 when Deloitte were re-elected as auditors at the Sevco AGM.

While the old board had plenty of critics they were certainly prolific when it came to issuing statements. I suspect that both Deloitte and the board would have been quick to notify the AIM of a parting of the ways.

According to the Companies Act 2006: “517 Notice to registrar of resignation of auditor

(1)Where an auditor resigns the company must within 14 days of the deposit of a notice of resignation send a copy of the notice to the registrar of companies.”

Having ran squealing about the £500,000 payment due to Newcastle if Sevco are promoted surely Mr Murray has a duty to inform Companies House of a clear offence committed by the previous board.

With no sign of an official complaint being made those of a suspicious nature may be thinking that Deloitte have walked away rather than have their reputation tarnished by working for Mr King or through fear of reputational damage in being involved in an insolvency event.

As he braces himself to announce that Sevco have left the AIM, to greatly curtail share dealing and value, perhaps Mr Murray may care to explain what date and for what reasons Deloitte walked away from the company currently running the crisis hit football club.

An update of the company website, which currently lists WH Ireland and Deliotte as current advisers, would also assist transparency for potential shareholders.

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