Deloitte fined £6m for 2016-20 audit failures at Go-Ahead Group plc (Southeastern and London Midland)

Djgr said:

Indeed. Anyone missing Virgin Cola?!

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Yeah, shame that, they say it washed down the Trump steak rather well - it had a tendency to stick in the throat, I understand.

GZ

The Southeastern situation was examined by DfT at the time and they, in effect, fined GoAhead for this failure some years ago by demanding backpayments. The issue here was said to be that the access charges for HS1 were supposed to be a pass through to DfT, ie. were not a commercial at-risk item. Therefore the franchise agreement imposed a duty of candour on management in such matters. But when the actual charges fell below the amount the Department has assumed the funds ended up being included in earnings. I have a recollection that the discrepancy first came to light when DfT was preparing the documentation for the new Southeastern franchise, in about 2015 or 2016, but took some time to investigate....and one remedy might have been to terminate the franchise agreement altogether, but that would have knocked out a bidder....