MPs press for a probe into KPMG over HBOS Reading

A GROUP of MPs has ramped up pressure on the accountancy watchdog to probe KPMG over allegations about its role in the HBOS Reading fraud scandal.

The All Party Parliamentary Group on Fair Business Banking will write to Financial Reporting Council chief Stephen Haddrill pressing for an investigation of the accounting giant’s audit of the bank in February 2008, months before it hit the rocks. Last night the APPG, led by Kevin Hollinrake, published the draft of the Project Lord Turnbull report.

The report, leaked onto the internet this week, raised damaging allegations about the criminal fraud at the Reading office. The APPG wants the FRC to investigate KPMG’s role. It said: “There is a clear chronology of missed opportunities.”

The FRC said it will respond to the letter once it is received. KPMG said it “strongly refutes” the allegations in the report. “We have cooperated fully with the detailed investigations undertaken, including those by the PRA, FCA and the FRC, none of which concluded that our work did not meet the applicable audit standards of the time,” the group said.

The APPG also repeated its calls for the Serious Fraud Office and National Crime Agency to investigate the alleged criminality of people named in the report. Six people were jailed last year over the scandal.