BFI funds’ auditor resigns

Amid ongoing concerns about transactions involving the funds offered by troubled fund manger Bridging Finance Inc. (BFI), the funds’ auditor, KPMG LLP, has stepped down.

In a notice to BFI fund unitholders, BFI’s receiver, PricewaterhouseCoopers LLP (PwC), said that on Oct. 13, KPMG informed the receiver it was reasigning as the auditor of BFI’s funds.

“Prior to KPMG’s resignation, we had advised it of concerns regarding the financial statements of the Bridging funds that had been audited by KPMG,” PwC said in the notice.

KPMG declined to comment on the notice.

“Our professional regulations prohibit us from commenting on confidential client matters,” said Kevin Dove, director strategic communications at KPMG Management Services LP, in an emailed statement.

PwC was first appointed BFI’s receiver by the Ontario Superior Court of Justice back in April, amid an investigation by the Ontario Securities Commission (OSC) into possible undisclosed conflicts of interest involving the funds. The OSC has not made any enforcement allegations in the case.

To date, PwC has been unable to provide net asset values for the BFI funds, and it has detailed concerns about certain transactions involving the funds in its reports to the court.

In its latest notice, PwC said that along with alerting KPMG to concerns about the funds’ financials, it also “advised KPMG of efforts that would be directed at analyzing and assessing claims that the Bridging funds and/or unitholders may have against various parties, including KPMG, arising out of prior events related to Bridging and the Bridging funds.”

Earlier this month, the court appointed Bennett Jones LLP to represent investors in any legal action that may arise out of the BFI case. The firm also represents investors’ interests in the process of selling the firm’s assets currently being undertaken by PwC.

The deadline for bids under the court-approved sales process is Nov. 8.

PwC has approved 11 prospective bidders, and said that it’s currently working with them as “they complete their diligence efforts.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.