Car dealer Lookers to ditch auditor as fraud probe nears end

Lookers, one of Britain's car dealers, is parting company with its auditor following the discovery of a potential fraud which has forced it to delay its annual results and cast doubt over its future.

Sky News has learnt that Lookers, which last week announced that it was cutting 1500 jobs as it fights to come through the coronavirus crisis, has contacted several audit firms about replacing Deloitte.

The process is said to be at an early stage, but one person close to Lookers said it was likely to be concluded soon after the company's 2019 audit opinion and full-year results have been approved.

Last week, it said it expected to publish the results by the end of the month "subject to the conclusion of banking discussions and audit".

The company was able to start reopening its showrooms last week following a desperate ten weeks for the UK's automotive industry.

Details of the ongoing fraud probe are sketchy, although Lookers has said that Grant Thornton, the accountancy firm, was drafted in to lead it.

Lookers said that Grant Thornton's draft report was under review.

The company's decision to cut 1500 jobs was taken "in light of potential demand, a smaller dealership estate and the structural changes taking place across the industry", it added.

Sky News revealed last month that Lookers had snubbed a tentative merger approach from rival Pendragon because of the all-consuming nature of its existing talks with lenders, regulators and auditors.

Shares in Lookers have collapsed by almost two-thirds over the last year, although they rose sharply during Friday's trading session.

The company now has a market value of just under £123m.

Lookers declined to comment on the prospective change in auditor this weekend.