WASPS auditors have cast a shadow of doubt on the future of the club after its accounts revealed it is relying on shareholder cash to stay afloat.
And bosses at the rugby club were also slammed after “falsified” information was provided concerning a financial irregularity that saw the accounts delayed by more than three months.
Independent auditors assessing the group’s accounts for the year up to June 2017 say there is “material uncertainty” over whether Wasps can continue as a “going concern”. Wasps Finance Plc is relying on shareholder support from Irish millionaire owner Derek Richardson to be able to meet its ongoing cash flow requirements and bond covenants, according to the report.
But it stressed the club had enough cash to continue operating for the “foreseeable future” an that directors were “satisfied that existing shareholder support will continue”. Mr Richardson has previously bankrolled the club to the tune of millions of pounds prior to the move to Coventry in 2014.
The auditors report said: “If shareholder support should not be forthcoming, the Group would have insufficient cash without securing additional funding to meet its ongoing liabilities, which include the payment of interest to the Company.”
It added: “These 15 month forecasts show that the Group continues to be dependent on the financial support of its shareholder, Derek Richardson, with financial contributions needed to fund ongoing cash flow requirements and to meet bond covenants.
“The directors are satisfied that existing shareholder support will continue to be forthcoming... However, as this letter of support is not legally binding, the directors have drawn attention to the risk that shareholder support is not forthcoming in disclosing a material uncertainty relating to going concern in the basis of preparation to the financial statements.”
Wasps Finance plc was set up to handle the £35 million bond scheme launched to fans in April 2015.