Financial watchdog launches probe into WoodGroup

Engineering giant Wood Group is being investigated by the UK’s financial watchdog following an independent review which found “cultural failings” with its accounting practices.

The Financial Conduct Authority (FCA) probe will look into the period between January 2023 and November 2024.

A Wood Group spokesperson said the company would cooperate fully with the investigation.

The Aberdeen-based group, which provides oilfield and engineering services, warned in April that it had to restate its accounts from previous years.

It also delayed the publication of results for the 2024 financial year, which were due at the end of April.

This meant its shares have since been suspended from trading on the London Stock Exchange.

Earlier this year, an independent review by Deloitte found “material weaknesses and failures in the group’s financial culture” within its projects business unit and the engagement with its group finance team.

This included “inappropriate management pressure” to maintain previously reported positions and “over-optimism and/or lack of evidence in respect of accounting judgements”.

The report said: “The cultural failings appear to have led to instances of information being inappropriately withheld from, and unreliable information being provided to, Wood’s auditors.”

Wood Group stressed there has been significant change within the business since the period in question and steps taken to address the failings discovered.

The firm has also been the subject of a takeover approach by Dubai-based buyer Sidara.

The latest offer, received in April, valued the company at around £242m.

A year ago, Sidara made a £1.56bn takeover approach before talks collapsed. Wood Group’s share price subsequently plummeted.

The directors of Wood are recommending the proposed takeover by Sidara but a formal offer has been postponed several times while doubts remain about the accounts.

In what will be seen as a further blow to its status as an investable firm, it was announced today that Wood Group will be removed from the FTSE indices from 2 July, having had trading in its shares suspended for months.