Business headlines: KPMG; Boeing; Purplebricks; ITV; 1MDB; Uber; TPG; Vodafone


It’s vital to be aware of the latest news in the industry you’re working in or applying to. Here are some headlines you might find interesting:

KPMG fined £5m over 2009 Co-operative Bank audit
KPMG has received a £5m fine after it admitted to misconduct over its 2009 audit of the Co-operative Bank. KPMG’s audit came after the bank merged with building society Britannia. The Financial Reporting Council (FRC) accused KPMG of ‘failing to exercise sufficient professional scepticism’ after it failed to alert Co-op bank to the fact that some of the loans it had acquired through the merger were riskier than initially thought. KMPG has stated it regrets that its audit fell short of ‘appropriate standards’ and will pay £4m to settle the case. Audit partner Andrew Walker was fined another £100,000 and KPMG will also be responsible for paying the FRC’s costs of £500,000.

Boeing admits knowing of 737 Max issues before fatal crashes
US aerospace company Boeing has said it knew that there was a problem with its 737 Max jets a year before the model was involved in two fatal crashes. It also admitted it took no action at the time. The firm stated it had inadvertently made an alarm function called Angle of Attack (AOA) optional rather than standard but insisted flight safety was not compromised by the change. The AOA alert is built to let pilots know when two different sensors are reporting conflicting data. 189 people were killed in a Lion Air crash involving the 737 Max model last year, followed by a similar crash of an Ethiopian Airlines flight 5 months later which killed all 157 people on board. The latter led to all 737 Max planes to be grounded in March.

Purplebricks shares down after founder exits
Online estate agent Purplebricks has seen its shares drop by over 5% after the company’s founder and chief executive Michael Bruce has quit. Vic Darvey, the company’s chief operating officer, will take over Mr Bruce’s position as chief executive. Purplebricks was founded in 2012 by Mr Bruce and his brother. The firm cut its sales forecast in February from between £165m and £175m to between £130m and £145m. Chairman Paul Pindar stated that the company’s geographic expansion had been too rapid, leading to disappointing results. The company announced that it would be pulling out of Australia and placing its US business under review. Its Canadian business has meanwhile continued to flourish.

ITV blames Brexit uncertainty for weak ad sales
ITV has blamed Brexit uncertainty for a larger than expected fall in advertising revenue in the first half of the year, forecasting a 6% drop. The broadcaster also quoted a lack of World Cup football and the timing of Easter as reasons behind the weak ad sales. Total revenues were down 4% to £743m. Despite the low ad figures, chief executive Carolyn McCall emphasised that first quarter performance was as expected and full-year guidance was still on track.

US to return $200m in recovered funds from 1MDB state fund to Malaysia
The United States is returning almost $200m (£152.4m) to Malaysia in funds recovered from seized assets tied to the 1Malaysia Development Berhad Fund. The state fund was set up in 2009 to boost Malaysia’s economy through strategic investments, but billions of dollars were diverted from the fund into private hands. US authorities have so far retrieved $57m (£43.8m) tied to a Hollywood firm which it accuses of using 1MDB funds to finance films. Another $139m (£106.8m) linked to the sale of a Manhattan property bought with money from the fund was also given back to Malaysia. Former Malaysian prime minister Najib Razak, who helped set up the fund, is facing more than 40 charges related to his role in the financial scandal.

Uber drivers across cities in the UK and US are going on strike 24 hours before the ride-hailing app’s stock market flotation in the United States to protest against unresolved pay issues.

The Australian Competition and Consumer Commission has blocked the A$15bn (£8bn) merger between mobile and internet data providers TPG and Vodafone Hutchison Australia.

Source: HN Global