KPMG refuses to sign off on Tahmoor Coal’s financial statements

Sanjeev Gupta’s auditors have issued a damning assessment of the state of his accounts. Picture Mark Brake.

Does anyone believe anything Sanjeev Gupta says these days? His auditors at KPMG don’t.

If you’re a coal miner in NSW you probably won’t have much in common with a besuited audit partner in Adelaide. There’s at least one thing, though: you think Gupta is full of the proverbial. Even the normally staid auditors at KPMG have given up, issuing a savage response after being required to look over the financial statements issued this week by Gupta’s mothballed Tahmoor colliery in NSW.

“The written representations from management and the ­directors of the group cannot be considered reliable,” says KPMG partner Sheenagh Edwards.

It’s much the same opinion as any of the British businessman’s legion of creditors – though they’re a bit less polite about it, in Margin Call’s experience.

It took a court order to force a set of annual accounts out of Tahmoor Coal.

This week KPMG declined to issue an opinion on what was presented. That’s a big deal in ­auditing circles. It says KPMG doesn’t believe the company’s books are accurate.

“We have identified inconsistencies between written representations and other audit evidence which remain unresolved. We are therefore unable to rely on representations from management and the directors of the group,” Edwards says.

According to Gupta – and fellow Tahmoor directors Iain Hunter and Theunis Victor – the company is only weeks away from landing a $US95m ($146m) deal to save the mothballed NSW coking coal mine. They’ve already got $20m in the door, with the rest – from an unspecified lender – a few weeks away.

KPMG doesn’t believe it. The rest of the money will only come if Tahmoor gets creditors owed $19m to drop winding-up petitions – including its government-backed workers compensation insurer, Coal Mines Insurance, which is owed $4.7m.

And the NSW government, owed $29m in royalties, would need to drop a security charge over Tahmoor’s mining tenements. In total, about $100m in invoices are overdue for payment, and Gupta would need to get those creditors to believe it will all be paid back by the end of next year. They’d all be mad to agree to any of it. Particularly after revelations Gupta ripped $427m out of Tahmoor to keep his Whyalla steelworks alive.

And the company would still need to find an extra $100m or so to get the mine up and running, given management says it will need $244m to do so. About $72m of that has been promised from other parts of Gupta’s flailing corporate empire, according to the accounts.

Except that KPMG doesn’t believe they’ve got enough cash or assets to supply it, on the evidence available.

Gupta says he believes “there are reasonable grounds to believe the group will be able to pay its debts as and when they become due and payable”.

KPMG’s view?

“We are unable to form an opinion on whether the going concern basis of preparation of the group’s financial report and associated going concern disclosures is appropriate,” it said.

“Given the material and pervasive impacts of this to the financial report as a whole, we are therefore unable to form an opinion on the financial report.”

Translated into English? Sanjeev, you’re full of it.

A Russian spy with no taste? Surely not

News that an Australian cyber security executive has been accused of selling trade secrets to a Russian buyer for $US1.3m ($2m) will ­surely keep intelligence bosses awake at night.

Especially given that the mysterious man in question, 39-year-old Peter Williams, worked for a company which reportedly developed hacking tools for the Five Eyes security network.

Beyond a few skeleton details, little is known about Williams. The US resident clearly scrubbed most online profiles before he was charged. But the items that federal authorities have seized certainly give an insight into his taste – or lack thereof.

In addition to the Washington DC house, prosecutors have seized a collection of 22 luxury watches.

These include brands such as Longines, Tag Heuer, Breitling and three Apple watches.

However, in a brutal move from the authorities, the incredibly detailed itemised list notes that seven of the 22 watches are “replicas”. In other words, they are fakes.

“(If these allegations are true) I hope he paid full price for them,” one cyber security source quipped to Margin Call.

The criminal allegations are yet to be tested in the courts and Williams is currently innocent in the eyes of the law.

But he is certainly guilty of crimes against fashion: two Moncler jackets, one light blue, one black, were seized.

Seven bank accounts, including three Aussie accounts and a crypto holding, have also been seized.

But spare a thought for Williams’ significant other.

Also taken into government custody was “one light blue Louis Vuitton handbag, one woman’s Tiffany lock bangle with diamonds and gold, one woman’s diamond solitaire ring, (and) one Tiffany and Co diamond and tanzanite flower ring”.

His legal team was approached for comment.