A Bulgarian regulator said on Thursday it will fine the global accounting firm KPMG and two of its employees, saying they did not properly vet the books of Corporate Commercial Bank before it was hit by a run on deposits.
KPMG did not have any immediate comment.
Corpbank, majority-owned by a Bulgarian businessman who was later charged with embezzlement, was hit by a bank run in June, triggering the Balkan country's worst financial crisis since the 1990s.
KPMG's audits of Corpbank were marked by "significant gaps and inconsistencies", according to findings by the regulator in December that fed concerns about Bulgaria's financial sector.
After Corpbank's collapse, the Commission for Public Oversight of Statutory Auditors launched an investigation into KPMG's audits between 2009-2013 and decided to fine it for each of the five years it had audited Bulgaria's fourth biggest lender.
The total fine for the company will be 100,000 Bulgarian levs ($60,000). Two KPMG employees will also be fined, although KPMG has the right to appeal against the regulator's verdict within seven days.
"The commission decided to fine KPMG 100,000 levs -- 20,000 levs for each year -- for significant gaps and inconsistencies in Corpbank audits," Vanya Doneva, the chairwoman of the Commission for Public Oversight of Statutory Auditors, told Reuters.
Bulgaria's central bank seized control of Corpbank during the run in June and shut it down, then canceled its license in November and asked a court to open insolvency proceedings saying an audit pointed to a huge capital shortfall and major failings in the way Corpbank was run.
Corpbank's books were audited by KPMG at the end of the 2013 financial year. It found less than one percent of the bank's loans to be non-performing, against an average of 17 percent for Bulgarian banks.
Copyright Thomson Reuters. All rights reserved.
Get the Most Popular Lawyerherald Stories in a Weekly Newsletter
Join the Discussion
Related Articles
