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Wood Group, the UK energy engineering company, has said it is under investigation by financial regulators over the withholding of information from its auditors.
The company, which is the subject of a £242mn bid from the United Arab Emirates-based Sidara, said in March that it would restate its financial results and suspend its shares, after an independent review found it had either withheld or supplied unreliable information to its auditors KPMG.
On Friday, the company said the UK’s Financial Conduct Authority would probe the period from early 2023 until Wood’s announcement in November that it would undertake an independent review. Wood said it would co-operate fully with the investigation.
The FCA confirmed it was investigating Wood without giving further details. This is the first time that the regulator has exercised its increased ability to “name and shame” more of the companies it investigates, including those that disclose it themselves.
Wood has operations around the world, serving oil and gas clients as well as mining companies and decarbonisation projects in areas such as carbon capture and storage. It published revenues of $5.9bn during 2023.
It expanded rapidly in 2017 through its £2.2bn purchase of rival Amec Foster Wheeler, but has since struggled with high debts and low cash flow.
Sidara, which walked away from a £1.5bn offer for Wood last year, made a new nonbinding offer in April, but said a firm offer would depend on Wood publishing its audited 2024 accounts.
The two sides have extended the deadline by which Sidara has to make an offer four times, with the current deadline set for June 30.
Preliminary findings of last year’s review, carried out by Deloitte, found problems with the “application of relevant accounting standards” and “gaps and deficiencies within the application of controls”, Wood said in February.
Wood said that as a result of the review, it identified “material weaknesses and failures in the group’s financial culture”, as well as “inappropriate management pressure”.
These “cultural failings . . . led to instances of information being inappropriately withheld from, and unreliable information being provided to, Wood’s auditors”, it added.
Separately, Arvind Baland, who joined as finance chief in 2024, stepped down in February after he admitted misstating his accountancy qualifications, following questions from the Financial Times.
Despite its troubles, Wood has continued to win contracts. This month it announced a five-year contract with Brunei Shell Petroleum.
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