Apple chip component supplier IQE has today swapped auditors, giving PwC the boot after a short-selling hedge fund accusing the tech company of being an “egregious accounting manipulator”.
In a regulatory announcement this morning, IQE said KPMG would audit its 2017 financial year results due to be published on 20 March. PwC had acted as the Aim-listed company’s auditor since 2005.
IQE confirmed that in the handover process, PwC “provided the company with a written statement which confirmed there were no matters which needed to be brought to the attention of the company’s members, creditors or directors”.
It added that the announcement was not needed under listing rules, but “in the context of the two recent broadly similar and misleading reports published by funds with a short position in IQE, the company wishes to go above and beyond the disclosure requirements”.
Last week, IQE’s share price tumbled after Muddy Waters Capital echoed concerns from ShadowFall Capital about the company’s joint ventures. Both short sellers have said the Compound Semiconductor Centre (CSC), which IQE runs jointly with Cardiff University, appear to have no other customers except IQE yet have contributed a large portion of the company’s profits in earlier years.
Cardiff University was today also forced to defend the venture. “The university entered into the joint venture as a strategic investment to ensure our world leading research has a well-founded route to commercialisation. Several project wins have been announced within the last year,” it said in a statement.
Other analysts have dismissed the short sellers’ claims. Barclays analysts said the ShadowFall research shows a “misunderstanding of the compound semiconductor industry” while Peel Hunt retained its “buy” recommendation last week.