Industry watchdog the Financial Reporting Council (FRC) has launched an investigation into the financial statements of Studio Retail Group the business bought for £26.8 million by retail titan Mike Ashley’s Frasers Group in February this year.
The audit of the group’s finances was conducted by global accountancy firm Mazars LLP and the action refers to statements for the “period ending 26 March” just a month after Frasers made its successful bid for the retailer.
Mazars said: “Mazars can confirm that the FRC has commenced an investigation in relation to the audit of Studio Retail Group plc for the period to 26 March 2021. Mazars is cooperating fully with the regulator and, respecting client confidentiality and due process, will provide no further comment during the course of the investigation.”
Studio Retail Group, formerly known as Findel, sells products including clothing and furnishings where customers can spread payments over periods of months. Frasers had already held a 30% stake in the business that it stood to lose due to the company’s collapse into administration.
The FRC said that it had “commenced an investigation in relation to the audit conducted by Mazars LLP of the financial statements of Studio Retail Group plc for the period ended 26 March 2021.”
The decision was made at a meeting of the FRC’s Conduct Committee on 13 September 2022 and investigations will be conducted by the FRC’s enforcement division under the audit enforcement procedure.
Frasers that owns high street chains including Sports Direct and Jack Wills has recently rescued businesses from the jaws of the administrator, including Manchester-based fast fashion platform Missguided that it snapped up for £20 million in June this year.
It also saved Evans Cycles from a similar fate in 2018 and rescued House of Fraser in a £90 million bail out in the same year.
Mike Ashley announced his decision to step down from the Frasers board last month to hand the reigns of the retail giant to his son-in-law Michael Murray.