KPMG appoints London legal firm as part of tax four probe
ACCOUNTANCY firm KPMG confirmed last night that a London-based legal adviser has been appointed to head up a probe into the circumstances surrounding the arrest of the top management tier of its Belfast-based operation.
Four partners - northern chairman Jon D’Arcy, Belfast senior tax partner Eamonn Donaghy, Irish corporate finance business head Paul Hollway and senior partner Arthur O’Brien - remain on indefinite leave from KPMG.
It follows their arrests and subsequent release last Wednesday by enforcers from HM Revenue & Customs as part of what is believed to be an investigation into the activities of property investment company Jeap, in which the four men are shareholders and directors.
Jeap was set up in 2005 at the height of Ireland's property boom to finance property development on both sides of the border, but incurred massive losses when the bubble burst three years later.
Indeed according unaudited financial statements for the year to March 2014, it had cash-in-hand of just £391 but liabilities of more than £4.3m.
HMRC said it had detained the men in connection with a "suspected tax evasion".
The Revenue and the four men are believed to have been in correspondence last year in connection with the activities of Jeap.
Sources believe that among the areas of likely questioning to the four KPMG partners will have been how losses accrued by Jeap were offset against tax.
Jeap is registered to the home address in Saintfield of Arthur O’Brien, one of those arrested.
KPMG was unable to confirm the name of the UK legal firm it has hired to investigate the Belfast four, but it expects to make a statement today or tomorrow as it seeks to limit the damage to its reputation from last week's arrests.
It has also emerged that KPMG, one of the so-called 'big four' accountancy firms, has drafted in a number of senior managers from Dublin to ensure the smooth running of its Belfast office.