Wilkins Kennedy negligence claim clouds takeover deal

A high-profile battle between a celebrity-backed hotel chain and its former auditor threatens to cast a shadow over the takeover of accountant Wilkins Kennedy.

London-based Wilkins Kennedy was ordered to pay $11.6m (£8.8m) to Harlequin Property, the owner of a luxury hotel resort in the Caribbean, in December 2016 over allegations of professional negligence following a long-running legal saga.

The dispute was one of the most high-profile cases to take place between a business and a top-20 accountant in recent years and centred on Wilkins Kennedy advising both Harlequin and its building company when they were at loggerheads over costs.

Sources say the owners of Harlequin, which claims its beach resorts are popular among celebrities including one-time Wimbledon singles champion Pat Cash and Coronation Street actress Michelle Keegan, are now urging the Institute of Chartered Accountants in England and Wales (ICAEW) to investigate the business just as it secures a takeover by Cogital Group.

The ICAEW is understood to be looking into the matter with a report expected to be sent to its investigations committee in the coming weeks. An ICAEW spokesman said the body could not comment on whether any matter may be under consideration. “Where such consideration results in disciplinary action being taken then a public announcement will be made,” he said.

The move comes at a sensitive time for the accountancy firm, which agreed to be acquired by Cogital only last week. Cogital was founded by John Connolly, the former UK boss of Deloitte, a City veteran who also chairs G4S, two years ago.

A spokesman for Cogital said the firm was aware of “this historical matter and the settlement made in 2016”, adding: “More importantly, we are delighted to welcome the Wilkins Kennedy team into the group.”

David Ames, Harlequin’s chairman, was last year charged by the Serious Fraud Office for three counts of fraud.