Studio Retail financials under investigation by watchdog

// Studio Retail accountant Mazars is under investigation by the Financial Reporting Council (FRC)
// The probe relates to Mazars’ work at Studio Retail Group for the year to March 26, 2021

Studio Retail Group accountant Mazars is under investigation by the Financial Reporting Council (FRC) for his work on the online retailer’s financial statements for the 12-month period to March 26, 2021.

The accounting firm had been tasked with auditing the books of the struggling Studio Retail, which eventually went bankrupt in February 2022 before being bought out by Mike Ashley.

A statement posted on the FRC’s website says the watchdog has “opened an investigation into the audit conducted by Mazars LLP of Studio Retail Group’s financial statements for the period ended March 26, 2021.”

Ashley’s Frasers Group stepped in to rescue the retailer – which ultimately collapsed under the pressure of soaring shipping costs, supply chain delays and cash flow difficulties – as part of a a £26.8m deal.

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Mazars said it would ‘co-operate fully’ with the FRC’s investigation, which could result in a significant fine for the accountancy firm – one of the largest in the UK.

Frasers Group – which has held a 28.9% stake in the retailer since 2015 – declined to comment on the investigation as it relates to accounts from before it took over the business.

Mike Ashley previously tried to take over the business in 2019 when he launched a £140million takeover bid for the whole business, a move that was rejected by Studio shareholders.

The news comes as Ashley prepares to step down from Frasers Group and her role as director of the board of Sports Direct and Flannels at the AGM later this month, after handing over the business to her son-in-law Michael Murray last year.

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