JD Classics, what have they been up to?

[Doofus]

jwilco said:

Doofus said:

Really? By my reckoning, that makes their house worth €9,000,000.

How are you calculating that?

0.2%

[neutral 3]

Has Tuke got any ££ yet ?

[neutral 3]

lowdrag said:

Curiosity - what's the council tax? Here in France you would wince at the cost. We have friends who have "nice" house in an upmarket area around Le Mans and they pay €18,000 p.a. I have a medium house in another commune and pay £2,500.

Is these figures Taxe Fonciere and Taxe d’habitation ??

[lowdrag]

Yes, 50/50 split. It depends in which commune you live, with us here being residential and virtually no industry we pay £2,500 for our four bed house. Elsewhere, as you can see, it gets very expensive.

[BobToc]

I see the administrators are suing PwC for missing the fraud in their audits.

[ettore]

BobToc said:

I see the administrators are suing PwC for missing the fraud in their audits.

I’m not bloody surprised!

[lowdrag]

I've been expecting that from the start of the debacle. But to someone who knows only maths and nothing about cars it could happen I suppose. Not excusing them of course, and accountants know how to charge for seemingly simple tasks but due diligence is still there. For those who lost money I hope the case succeeds. It was only a paltry £68 million, wasn't it?

[Burwood]

ettore said:

BobToc said:

I see the administrators are suing PwC for missing the fraud in their audits.

I’m not bloody surprised!

And will almost certainly fail given the limits in scope of an audit. The directors are responsible and auditors rely on directors representations.
The only area I can see being a bit sticky, maybe, being cars on their balance sheet with inflated values, if that was the case. The reality being, PwC will be insured and it is up to their insurers whether they settle given the cost of litigation could run 8 figures I suppose.

[ettore]

Burwood said:

ettore said:

BobToc said:

I see the administrators are suing PwC for missing the fraud in their audits.

I’m not bloody surprised!

And will almost certainly fail given the limits in scope of an audit. The directors are responsible and auditors rely on directors representations.
The only area I can see being a bit sticky, maybe, being cars on their balance sheet with inflated values, if that was the case. The reality being, PwC will be insured and it is up to their insurers whether they settle given the cost of litigation could run 8 figures I suppose.

Presuming that Alvarez & Marsal are still in charge here then I doubt litigation would start without there being a decent hope. Surely there will be false transactions, phantom cars, inflated values and all manner of things. Would impact both the audit and financial d/d (which I think was one of the other Big 4) I would have thought?

[Burwood]

ettore said:

Burwood said:

ettore said:

BobToc said:

I see the administrators are suing PwC for missing the fraud in their audits.

I’m not bloody surprised!

And will almost certainly fail given the limits in scope of an audit. The directors are responsible and auditors rely on directors representations.
The only area I can see being a bit sticky, maybe, being cars on their balance sheet with inflated values, if that was the case. The reality being, PwC will be insured and it is up to their insurers whether they settle given the cost of litigation could run 8 figures I suppose.

Presuming that Alvarez & Marsal are still in charge here then I doubt litigation would start without there being a decent hope. Surely there will be false transactions, phantom cars, inflated values and all manner of things. Would impact both the audit and financial d/d (which I think was one of the other Big 4) I would have thought?

If what you say is correct (false sales and phantom cars) then agreed, the auditors are exposed. The examination, given a relatively small number of transactions would involve vouching a number of larger ££ transactions .The cars 'in stock' should also have been identified (physically seen, evidence of ownership) and the cost vouched (direct to invoices AND bank records). Valuations should also have been carried out given the way classic car prices change.

[BobToc]

BobToc said:

The affidavit supplied in support of that application stated that the Administrators "have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be …" including that: "a. at least 29 of JDCL's top 50 sales by profit were fictitious, of which 28 were entirely fictitious; b. at least a further 15 sales, including four of the top 50 sales by profit, related to a transaction with a third party which was allegedly not concluded but was recorded in the books and records; c. in addition, outside the top 50 sales, a further 8 sales were entirely fictitious; … f. Mr. Hood was only able to accomplish this alleged fraud because, in large part, he appears to have either grossly overstated the value of sales and purchase transactions which did occur, or to have generated entirely false sales and purchase transactions in JDCL's books and records."

I made this point in connection with the Hood vs Tuke judgement. If it’s true then PwC surely have to explain how they overlooked or were misled on this?

[Willhire89]

BobToc said:

BobToc said:

The affidavit supplied in support of that application stated that the Administrators "have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be …" including that: "a. at least 29 of JDCL's top 50 sales by profit were fictitious, of which 28 were entirely fictitious; b. at least a further 15 sales, including four of the top 50 sales by profit, related to a transaction with a third party which was allegedly not concluded but was recorded in the books and records; c. in addition, outside the top 50 sales, a further 8 sales were entirely fictitious; … f. Mr. Hood was only able to accomplish this alleged fraud because, in large part, he appears to have either grossly overstated the value of sales and purchase transactions which did occur, or to have generated entirely false sales and purchase transactions in JDCL's books and records."

I made this point in connection with the Hood vs Tuke judgement. If it’s true then PwC surely have to explain how they overlooked or were misled on this?

If there was a carousel of money which circled around repeatedly and that matched the purchase/sales then what else could PwC do?

Clearly if there was a sale for £1M and no £1M ever appeared through any of the JDCL accounts then that is basic stuff but if the fraud was sophisticated enough to match payments then it gets very hard to spot compounded if (as with Tuke) the deals were often multi car involving swaps and trades

[Doofus]

Willhire89 said:

BobToc said:

BobToc said:

The affidavit supplied in support of that application stated that the Administrators "have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be …" including that: "a. at least 29 of JDCL's top 50 sales by profit were fictitious, of which 28 were entirely fictitious; b. at least a further 15 sales, including four of the top 50 sales by profit, related to a transaction with a third party which was allegedly not concluded but was recorded in the books and records; c. in addition, outside the top 50 sales, a further 8 sales were entirely fictitious; … f. Mr. Hood was only able to accomplish this alleged fraud because, in large part, he appears to have either grossly overstated the value of sales and purchase transactions which did occur, or to have generated entirely false sales and purchase transactions in JDCL's books and records."

I made this point in connection with the Hood vs Tuke judgement. If it’s true then PwC surely have to explain how they overlooked or were misled on this?

If there was a carousel of money which circled around repeatedly and that matched the purchase/sales then what else could PwC do?

Clearly if there was a sale for £1M and no £1M ever appeared through any of the JDCL accounts then that is basic stuff but if the fraud was sophisticated enough to match payments then it gets very hard to spot compounded if (as with Tuke) the deals were often multi car involving swaps and trades

Two sets of records? Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

It's a while ago how, and I can't be arsed to trawl back through the detail to confirm the above, but that's how I recall it.

[Willhire89]

Doofus said:

Two sets of records? Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

It's a while ago how, and I can't be arsed to trawl back through the detail to confirm the above, but that's how I recall it.

and there is also the issue of how much the Montezemolo investment fund paid for JDCL and what it was really worth without all the inflated turnover/profit

[Burwood]

Willhire89 said:

Doofus said:

Two sets of records? Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

It's a while ago how, and I can't be arsed to trawl back through the detail to confirm the above, but that's how I recall it.

and there is also the issue of how much the Montezemolo investment fund paid for JDCL and what it was really worth without all the inflated turnover/profit

He's a damn crook (Hood) and if he gets away with hiding the money in trusts via his wife it's a travesty. I hope all relevant assets are restrained.

[silentbrown]

Doofus said:

Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

This isn't to do with Tuke (or at least, only indirectly). This is the appointed administrators suing the auditors for negligence, in an attempt to get more money for the creditors.

https://www.am-online.com/news/latest-news/2021/07...

The administrators expect their expenses to exceed £13m

[Burwood]

silentbrown said:

Doofus said:

Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

This isn't to do with Tuke (or at least, only indirectly). This is the appointed administrators suing the auditors for negligence, in an attempt to get more money for the creditors.

https://www.am-online.com/news/latest-news/2021/07...

The administrators expect their expenses to exceed £13m

I worked at PwC for 6 years and it's an eye opener to see certain fees
I believe a certain bank collapse earned £1b in fees and there was still a surplus when the alignment was wrapped up maybe a decade later.

It's called Blue Sky assignments

[Doofus]

silentbrown said:

Doofus said:

Surely the issue isn't with how much money Hood made, it's how much money he told Tuke he was making, and whether or not they had an agency agreemnt.

This isn't to do with Tuke (or at least, only indirectly). This is the appointed administrators suing the auditors for negligence, in an attempt to get more money for the creditors.

https://www.am-online.com/news/latest-news/2021/07...

The administrators expect their expenses to exceed £13m

I know it's not to do with Tuke, but people were referencing frauds committed against him.

[BobToc]

Willhire89 said:

If there was a carousel of money which circled around repeatedly and that matched the purchase/sales then what else could PwC do?

Clearly if there was a sale for £1M and no £1M ever appeared through any of the JDCL accounts then that is basic stuff but if the fraud was sophisticated enough to match payments then it gets very hard to spot compounded if (as with Tuke) the deals were often multi car involving swaps and trades

It is hard to catch, but if an auditor can’t be expected to pickup that 29 of the 50 most profitable sales never happened (not exaggerated, not mis-stated, they were entirely fictitious), then I’m even more negatively disposed towards the audit profession.

[DonkeyApple]

BobToc said:

It is hard to catch, but if an auditor can’t be expected to pickup that 29 of the 50 most profitable sales never happened (not exaggerated, not mis-stated, they were entirely fictitious), then I’m even more negatively disposed towards the audit profession.

The VC that bought in should have been carrying out its own regular, in depth checks also.

Ultimately fraud happens and good fraudsters, who are quite often accountants by training, know how to cook books so that third parties won't see anything during normal procedures. The law suit will settle whether Hood was really good at what he was doing or whether the market professionals were really bad.