Syedur Rahman of business crime solicitors Rahman Ravelli outlines the areas investigators could be focussing on.
The UK's Financial Conduct Authority (FCA) has reportedly launched an investigation into fraud at Goals Soccer Centres.
The five-a-side football operator announced earlier this month that it was to delist from the stock market after an investigation into its accounting practices found improper behaviour.
Trading in its shares was suspended in March after it said it had made a "substantial misdeclaration of VAT" totalling approximately £12M. It has been reported that audit firm BDO discovered "substantial destruction" of electronic information at Goals during an investigation into alleged accounting improprieties. BDO took over as the company's auditor from KPMG in June 2018.
Goals said earlier this month that it expects its listing on the AIM market to lapse with shares cancelled by 30 September. It said there was "material uncertainty" about the company's historical financial statements and has disclosed that work is being suspended on the company's full-year 2018 audit until "further clarification'' has been obtained on its historic financial statements.
At this stage, there appears to be much that needs to be clarified at Goals. Both in terms of how financially secure the company is and the extent of any wrongdoing.
This investigation will be a classic case of examining whether there has been accounting fraud - manipulation of financial statements to disguise the financial health of the company. The FCA will be looking to see if Goals has overstated its revenue and whether it has been making inflated claims about the company's profits and net worth. Another area the FCA will be looking to investigate is the company's current assets against its current liabilities - and whether they have been overstated. This is to examine whether Goals has falsified the liquidity of the company.
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