Lycamobile auditor refuses to sign off accounts

The company donated £2.15 million to the Conservative party between 2011 and 2016, according to the Electoral Commission database

Lycamobile auditor refuses to sign off accounts

File photo of a Lycamobile outlet in Paris. (THOMAS SAMSON/AFP via Getty Images)

By:
Shajil Kumar

AUDITORS have refused to sign off on the accounts of mobile firm Lycamobile UK, run by an Asian-origin businessman, over discrepancies in the company’s latest annual filing.

Lycamobile auditor PKF Littlejohn said it has not been able to find “appropriate audit evidence” in the company’s financial statements for the year ended December 31, 2022, according to media reports.

Founded in 2006 by British-Sri Lankan businessman Allirajah Subaskaran, Lycamobile sells pay-as-you-go SIM cards targeted primarily at migrants making international calls.

The company donated £2.15 million to the Conservative party between 2011 and 2016, according to the Electoral Commission database.

PKF Littlejohn said they had been unable to find sufficient evidence over loans totalling almost £150m.

They included roughly £106m lent by the mobile firm to a complex network of related companies registered in countries including Cyprus, Dubai, and Singapore.

Almost £42m is also owed by Subsakaran and “P Subsakaran”, which is believed to be his wife Prema, The Telegraph reports.

Lycamobile said it fell to a £25m loss in its last financial year from £145m in revenues. It had made a pre-tax profit of £8.4m the preceding year.

The company is embroiled in a tax dispute with HM Revenue & Customs over VAT payments between 2012 and 2021.

The company also recorded a provision of £99m concerning this dispute, which its bosses claim has increased since.

Last October, Lycamobile’s French entities were convicted for money laundering and VAT fraud and the Paris criminal court had imposed a fine of €10m.

Lycamobile’s previous auditors, KPMG, resigned in 2017, blaming issues over audit evidence.