The Board of Directors of STARAMBA SE (XETRA: 99SC) is considering civil, criminal and professional actions against the responsible auditors of BDO AG Wirtschaftsprüfungsgesellschaft on the basis of the assessment communicated last Friday, November 30, 2018, by the auditor, BDO AG Wirtschaftsprüfungsgesellschaft, regarding the issuance of a refusal note for the amended annual financial statements and the amended management report as of December 31, 2017.
After BDO AG Wirtschaftsprüfungsgesellschaft announced in the course of the review of the amended annual financial statements and the amended management report as of 31 December 2017 that it had not obtained sufficient and suitable audit evidence as a basis for its audit opinions and had therefore once again failed to issue an audit opinion, the company believes that there are more and more clear indications that raise justified doubts as to the required neutrality of the responsible auditors.
“Based on the information available to us and the conduct of the auditors, we must assume that the responsible auditors have neither fulfilled their public mandate nor their duty of care and fiduciary duty towards the Company and its employees and shareholders, and must therefore take this conduct as the occasion for a review under civil and criminal law,” informs the Board of Directors of the Company.
“Until the beginning of the balance sheet meeting of the Board of Directors, we still assumed an audit opinion with few restrictions. It was clear to all participants that the company would have to publish the figures on 30 November 2018 in order to avoid coercive measures by the BaFin (Federal Financial Supervisory Authority). The surprising turnaround of BDO in the middle of the meeting on 29 November 2018, which has now led to the issuance of a new failure note, is not comprehensible from the company’s point of view,” said Christian Daudert, Managing Director of Staramba SE.
More detailed explanations on the topic ” turnaround ” by the BDO:
In an e-mail dated 28 November 2018 (17:38 hrs), BDO AG Wirtschaftsprüfungsgesellschaft will send the company a draft of a qualified auditor’s opinion and arrange a balance sheet meeting of the Board of Directors for 29 November 2018 at 15:00 hrs. At the same time, the responsible auditors inform that only “editorial changes” for tomorrow may occur. Just 34 minutes before the balance sheet meeting of the Board of Directors and the announced handover of the auditor’s report, the responsible auditors personally submit the declaration of completeness to the company and thus also weigh the company in the certainty that they will receive the previously discussed limited audit opinion.
“It was only at the beginning of the balance sheet meeting, after several months of reviewing the accounts, that a new rejection note was discussed for the first time and obviously pushed forward due to political motivation on the part of the responsible auditors,” said Christian Daudert, Managing Director of Staramba SE. Mr. Daudert further stated: “The reasons for the refusal of the audit certificate dated 30 November 2018 actually read exactly the same for a third party as the audit certificate with restrictions dated 28 November 2018. The restrictions and Key Audit Matters of the draft report dated Wednesday evening, which have been fully examined and discussed several times by BDO in recent months, should now lead to a refusal on Thursday afternoon”.
In any case, BDO AG Wirtschaftsprüfungsgesellschaft is guilty of failing to state its reasons.
“The responsible auditors could not present conclusive reasons that had not already been examined and referenced several times. The Board of Directors of Staramba SE is of the opinion that “it was obviously not possible to refuse the 2017 annual financial statements, which had been prepared, because all audit evidence had been provided by the company”.
The company was under pressure to act. Due to the publication of the figures for 2017, which had already been postponed once, the BaFin had threatened to sanction fines. The responsible auditors then took advantage of the predicament that had now arisen on the following day (November 30, 2018) to announce further lengthy audit procedures or the offer of a refusal.
“One must seriously ask oneself whether this was possibly done in the hope that the company would prefer to receive a quick refusal note through non-cooperation so that it can at least publish the 2017 annual financial statements in due time to avoid penalty payments of several hundred thousand euros and coercive measures by the BaFin,” Christian Daudert points out.
The preliminary result is known. The question of the underlying motivation of the auditors remains. “Possibly this was also connected with the negative reporting of the last days and the auditors got cold feet”, assumes Daudert.
The reasons given by BDO AG Wirtschaftsprüfungsgesellschaft for the renewed refusal of the audit opinion are unfounded from the company’s point of view.
“The remaining uncertainty regarding the intangible assets was not expressed by the auditors in a restriction of the draft auditor’s report of 28 November 2018,” Daudert said.
The company’s sales revenues of EUR 12 million were also confirmed to the company in person by the auditors after extensive, week-long audit procedures with a handwritten revision of the ad hoc announcement dated 30 October 2018. BDO, on the other hand, had expressed the remaining uncertainty until the end only in a restriction of the draft audit opinion dated 28 November 2018. At no time was there any mention of the reason for a refusal.
“Even the brief, general assessment of the tense liquidity situation and earnings crisis claimed by BDO is simply out of thin air and will not be dealt with further in the refusal note due to the lack of substantial evidence,” said Christian Daudert.
“There was and is no liquidity crisis at any time. Christian Daudert confirms and continues: “With a current account as of November 2018, the company has a considerably positive equity capital if the token proceeds are booked as sales as planned”.
“The responsible auditors of BDO AG Wirtschaftsprüfungsgesellschaft, Ms. Silvia Sartori and Mr. Andreas Blohm, have personally harmed the company without necessity with the refusal note with a staged like screenplay. Even out of our responsibility towards our shareholders and employees, we cannot accept this and therefore have a civil and criminal responsibility of the auditors assessed,” the Board of Directors concludes.