Quindell admits ‘aggressive’ past with £637m sale

SCANDAL-HIT insurance outsourcer Quindell today admitted the firm had been guilty of “aggressive” accounting as it dismantled the legacy of controversial founder Rob Terry.

Quindell confirmed its legal division is set to be sold to Australian law firm Slater & Gordon for £637 million, with Quindell also in line for 50% of any winnings from the division’s 53,000 noiseinduced hearing loss cases. The value of the deal surpasses Quindell’s market value and will see a chunky payout of up to £500 million for shareholders.

Management committed to more selloffs as it attempts to scale back and put itself on a sounder footing. Founder and former chairman Rob Terry rapidly expanded the company through acquisitions that took it into leftfield areas including scaffolding.

At its height, Quindell was worth £2 billion and Terry claimed it was the largest listed law firm in the world.

But the company has suffered a turbulent year, hit by an aggressive shortselling note, scrutiny of accounting practices and the departure of its joint broker Canaccord Genuity.

Interim chairman David Currie said today: “It was a perfect storm surrou n d i n g Q u i n d e l l . T h e re w a s a big retail base, a lot of short positions and some accounting concerns that were easily fuelled through online blogs.”

Problems culminated last November with the departure of Terry and finance director Laurence Moorse. The pair entered into a complex share sale deal that saw them offload Quindell shares on the promise of buying them back in two years’ time.

Quindell today confirmed suspicions of its a c c o u n t i n g p r a c t i c e s we r e grounded, saying a review of its books by PwC found accounts were “at the aggressive end of acceptable practice” and said the provi sions for noiseinduced hearing loss cases were “not appropriate”.

Currie said: “We’re selling the business where doubts have been seeded. There is a break from the past.”

Several Terry lieutenants are also set to leave. Chief executive Robert Fielding is leaving.

Currie is handing control to AO.com chair Richard Rose as interim chairman. The shares today rose by 10.3% to 152.3p.