Everton football club’s auditor is considering walking away from its role signing off the club’s accounts, raising questions over its financing and ownership, according to sources.
The Guardian understands that the accounting firm BDO has told Everton it will not be conducting the work, a decision which sources said was related to Farhad Moshiri’s ownership of the Premier League team. The firm had audited the club’s financial accounts for the previous two years, but the Merseyside club is now believed to be searching for a replacement.
Moshiri – who was said to be worth £1.7bn in the most recent Sunday Times rich list – has been widely reported as putting the club up for sale. Moshiri says he is not seeking a buyer.
Both Everton and Moshiri said BDO remained the club’s auditor. A spokesperson for Moshiri said: “Your assertions [about BDO] are based on nothing more than them refusing to discuss a client matter with a third-party journalist.
“In line with company best practice we do follow audit rotation. However BDO remain our auditors and have not resigned.”
BDO declined to confirm it would be auditing Everton’s latest accounts, which cover the year to the end of June 2022. However, two confidential sources with inside knowledge of events have told the Guardian that BDO has informally withdrawn from the audit and is not conducting work on the accounts, although Everton have not filed notification of this at Companies House.
By law, all UK companies are required to have their accounts audited, unless they are small enough to qualify for an exemption. With £193m of turnover and net assets of £49.7m, Everton are required to have an auditor sign off their accounts. It is unusual for an audit firm to leave a client scrambling to find a replacement.
Everton’s annual report is due to be published by 31 March 2023, according to Companies House, giving the club about five months to resolve the situation or find a replacement auditor. Lenders, investors and potential buyers of the club will require audited accounts before dealing with the club. Premier League rules also state that clubs must submit audited accounts to the league board in March of each season.
The club’s finances have been in the spotlight since international governments imposed sanctions on Alisher Usmanov – the billionaire oligarch and a longtime business partner of Moshiri – in the wake of Russia’s invasion of Ukraine.
Usmanov’s USM Holdings began a five-year sponsorship of Everton’s training ground worth about £12m a year in 2017 and paid £30m for a first naming rights option on the club’s new stadium, which is currently under construction at Liverpool’s Bramley Moore dock. MegaFon, which is owned by USM, and the Russian smartphone company Yota, which is part of the MegaFon group, sponsored Everton Women.
The club suspended all sponsorship deals with Russian companies backed by the billionaire oligarch when he was placed under sanctions in March.
Moshiri’s spokesperson added: “[Moshiri] was a minority shareholder in USM Group, a previous sponsor of the club and of which Mr Moshiri had been chairman before he resigned and severed all ties following the Ukrainian invasion. Any commercial or sponsorship relations with USM were terminated at the same time. These have subsequently been replaced with other sponsors.”
In the most recent financial year to the end of June 2021 the club lost £120.9m, on top of the £139.9m it lost the year before, according to accounts filed at Companies House.
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