Ethics and governance in the European Financial centers

Speaking after Keydata creditors meeting, PwC joint administrator and partner Dan Schwarzmann says the firm has not yet made a decision to pursue litigation against Keydata directors, auditors or the custodian of assets placed with Luxembourg investment vehicle SLS Capital which could affect the outcome for investors.

As IFA Online explains, the cash had been invested with Luxembourg-incorporated firm SLS Capital, however PwC discovered in June its underlying assets had been "liquidated and may have been misappropriated".

Elsewhere, more than 23,000 other savers face unexpected tax bills on their income after bonds issued by Keydata were found to be ineligible for Isas.

The funds, which had been placed with another Luxembourg company, Lifemark, were not invested properly and savers have been told they will now have to pay tax on their income.

Lifemark is under the supervision of the CSSF: see recent lists securitisation 210709.pdf, pages 1-2 and titrisation 210709.pdf, pages 1-2.

SLS Capital does not seem to be supervised by the CSSF.

As far as Lifemark is concerned, PwC is the auditor, which raises two questions:

1) Is the supervision in Luxembourg less strict when a big four firm is the auditor? 

2) What about the possible conflict of interest? I know that PwC Luxembourg specifies on every press release that "PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity", but it remains PwC UK and PwC Luxembourg are in the same network and have common interests.

 

Know more:

Financial Services Compensation Scheme

PwC