People who know, know that BDO knew all along…..

Here in the States, BDO is currently spending a lot of money – we’re
guessing tens of millions of Dollars – on a high-profile national TV
advertising campaign. Here’s one of our favorites:

http://www.youtube.com/watch?v=AW1jwwquCDc&list=PL631A57B79682F97E&index=1&feature=plpp_video

The strapline is always the same: ‘People who know, know BDO’. The
message is consistent too, that BDO is a highly capable, international
firm, and that the most switched-on businesspeople chose it to handle
the most complex, challenging mandates.

We’ve seen correspondence and reports suggesting that BDO knew in
early 2011 that Tiuta plc was insolvent, that client monies belonging
to the Connaught Income Fund Series 1 were being co-mingled with the
group’s own resources and used for unapproved loans and other
unauthorized purposes. We also hear that the firm’s Danny Dartnaill
claimed at the September 12 investor meeting to have been skeptical
about Tiuta’s business model, its claims to have secured additional
funding lines or its ability to return to profitability by ramping up
lending to £20m per month. And yet it seems to have gone along with
the directors’ attempts to continue trading, and even advised the FSA
that such a course of action could be viable.

We therefore believe BDO’s advertising slogan needs a rethink: it
should be changed to, ‘People in the know, know that BDO knew all
along’. And instead of spending millions of Dollars promoting itself
with expensive TV commercials, we say the best way for BDO to preserve
its reputation for professional competence would be to admit that an
inexperienced insolvency partner in the UK made a bad judgement call
in early 2011, and undertake to make good investors’ losses.