Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’s gloomy financial position before going bust in 2009.

Global accounting firm KPMG has been implicated in fraud charges against a sports company owned by Tom Hicks for keeping mum on the company’s gloomy financial position before going bust in 2009.
New York-based GSP Finance said in a lawsuit filed in US court that the accounting firm abetted the Hicks Sports Group’s (HSG) failure to disclose to creditors its ailing finances.


“KPMG’s fraud inflicted significant losses on GPS and the lenders. Had KPMG exercised professional due care, its March 31, 2008 independent auditor’s report would have disclosed both Hicks Sports’ inability to continue as a going concern and its breach of the Debt Covenant,” the suit said.
Hicks owns the American sports group, which holds the Dallas Stars hockey team and Texas Rangers baseball team. The sports company defaulted on a $540 million credit in 2009.
HSG suffered major losses shortly before Hicks acquired the Liverpool FC in 2007. According to GSP, the sports company lost $113 million in 2002, $67.8 million the year after, and $95 million in 2004.
GSP said it could have recovered the $67 million borrowed by HSG if only the accounting firm did raise concerns about HSG’s inadequate cash to sustain interest payments and debts.