Second High Street Group auditor resigns

Developer High Street Group has lost a second auditor, with the resignation of Manchester accountancy firm Haines Watts. HSG has struggled with delays in development, lost deals and legal disputes over the past year. In a letter filed at Companies House, Haines Watts said it was resigning “due to increased credit risk following non-payment of previously agreed fees”. PricewaterhouseCoopers was previously appointed by HSG to audit financial statements. In September 2020, it tendered its resignation having failed to complete the audit. The resignation letter made public in April said that HSG management had failed to provide accurate and timely information for a reliable audit. Haines Watts subsequently took over and completed the 2018 audit. HSG is currently late to file its 2019 accounts owing to a recent restructuring that will see most of its developments passed to new brand Hadrian Real Estate. The delay in accounts and transfer of assets comes as HSG loan note investors are seeking action to understand what the company owns and when they will get their money back. In June this year, the Newcastle-based company secured approval from investors to prevent early redemptions from its £100m loan note. Chairman Gary Forrest has also blamed “adverse social media” for three funds turning down a funding agreement that would have generated £175m. Last month, Forrest entered a legal dispute with fund Edmond de Rothschild REIM. EDR REIM alleged that HSG circulated false claims to loan note investors and acted with “malicious falsehood”, claiming it has investment at the Kent Street Baths scheme. A number of other developments have struggled through overexposure to commercial, with HSG unable to secure prelets or investment. This summer, lender Reditum Investments took control of the SPV owning the Strawberry Place development site and a separate vehicle that owns the completed Hadrian’s Tower (pictured). The latter also includes a charge of money outstanding and owed to contractor Tolent Construction. HSG said it still has interest in both and will seek to take these back and complete and sell the schemes. To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews Photo © High Street Group