Fletcher confirms KPMG hired to run the rule over major projects
By Paul McBeth
Sept. 25 (BusinessDesk) - Fletcher Building has confirmed it's hired audit firm KPMG to review four major projects to bolster governance in its construction division.
The Auckland-based company said KPMG is reviewing its two biggest projects in the B + I construction division and the two largest projects in its infrastructure business "to augment existing governance processes". Fletcher noted speculation about the appointment after the National Business Review last week reported the accounting firm was auditing the Justice and Emergency Services Precinct in Christchurch, the SkyCity Convention Centre and Commercial Bay developments in Auckland, and another unnamed project.
"The company notes that it routinely uses a variety of external consultants across a range of disciplines within its businesses, including in the construction division," it said in a statement. "Fletcher Building remains in full compliance with its continuous disclosure obligations."
Last month, Fletcher chairman Ralph Norris said the board would be refreshed as part of a normal rotation when fronting the company's annual results after chief executive Mark Adamson was dumped. Profit slumped after two major construction projects blew out, although the rest of Fletcher's workbook is seen having positive margins.
Fletcher kicked off its boardroom refresh last week, saying John Judge, who is chair of the board's audit & risk committee, will leave at next month's annual meeting while Kate Spargo, who has joined the board of ASX-listed Cimic Group, departed immediately. The board has started looking for replacements to expand its range of skills, especially in construction and contracting.
The company's existing auditor EY was paid $3.7 million to audit and review the 2017 accounts, up from $3.3 million a year earlier, and was paid $572,000 for other services in the year, compared to $854,000 in 2016.
The shares last traded at $7.79 and have dropped 27 percent this year.