Kuflink has 'successfully worked through' many of the issues recorded by EY

In a letter on 16th February, Ernst & Young (EY) confirmed that it had resigned as auditor of P2P lender Kuflink Ltd with immediate effect.

According to records on Companies House, EY had cited a letter it had issued in August 2020 which claimed that it believed Kuflink Group as a whole had “significant work” to do to improve certain aspects of its business. There is no suggestion of any wrongdoings by the firm.

“We believe the controls present, the level of governance evidenced, the level of record-keeping and the general oversight of the business are currently inadequate,” the letter said. 

In response, Narrinder Khattoare, CEO at Kuflink, confirmed that the business has already “successfully worked through many of these areas” recorded by EY, with some still being addressed in collaboration with its new auditors.  

“I would also like to note that none of the issues have or would have compromised any investor funds,” he said.

“We had already started working in September 2020 with our new auditors on the matters highlighted before EY formally withdrew, and this was communicated to the FCA online.”

In its resignation letter, EY had noted that its audit opinion dated 15th February 2021 contained an ‘except for qualification’ with regard to VAT.

“In respect of VAT, we have been in contact with HMRC since September last year, as the pandemic created delays in earlier contact,” Narinder commented.

“The VAT amount has already been set aside and we are working with our new auditors to settle by the June 2021 deadline required by HMRC.”

He added that the business is in a “strong position” and comes out of the pandemic in “very good shape”. 

“Losses have narrowed to a point where we are confident that we are likely to announce breakeven or a profit very soon. 

“As far as investors are concerned, £121m has been invested in the time we have been operating and I would point out that not one investor has lost money with us.” 

During the pandemic, £25m was paid back and, in total, over £73m in capital and interest has been returned to investors.

“Kuflink is in good health and looking forward to strong inward investment during the rest of this year and beyond."

EY declined to comment further. 

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