A small bank in Norway is suing accounting giant KPMG after losing NOK 125 million on the bankruptcy of collection agency group Finance Credit. KPMG audits some of the biggest companies in the Finance Credit system.
The bank, Sparebanken Vest, and other banks that suffered huge losses in the wake of Finance Credit's bankruptcy have complained KPMG failed to uncover or warn creditors of financial problems at the collapsed firm.
The local boss of KPMG said the lawsuit comes as no surprise. He repeated earlier claims, however, that KPMG did a satisfactory auditing job based on generally accepted accounting principles.
The two men who controlled Finance Credit, Torgeir Stensrud and Trond G Kristoffersen, were arrested after their firm was raided by state investigators. They face huge claims and punitive action.
Several Norwegian banks lost a total of NOK 1.3 billion on the Finance Credit scandal, and it's expected other banks will also file claims against KPMG.