A former chair of one of Britain’s biggest auditors is set to step down as chairman of Interpath, the independent advisory firm, due to a potential conflict of interest involving its private equity backer’s selection of auditor.
According to sources, Interpath, which has been involved in billionaire Sir Jim Ratcliffe’s cost-cutting campaign since acquiring a stake in Manchester United Football Club, will announce this week that John Connolly is resigning. Mr Connolly, who has chaired the company since its establishment in 2021, will be succeeded by Tamara Box, a former managing partner at the City law firm Reed Smith.
Insiders revealed that Mr Connolly’s decision to step down is linked to the upcoming appointment of Deloitte as HIG Europe’s global auditor, the private equity backer of Interpath. Mr Connolly retired as senior partner and UK chief executive of Deloitte in 2011, but still receives a pension from the firm.
It was agreed by him, Interpath, and HIG that his resignation would prevent any potential conflict of interest, with HIG requiring Deloitte to be free of conflicts. The irony of the situation is not lost, as Interpath was established after KPMG UK sold its restructuring arm due to conflicts between major accounting firms’ audit and consulting divisions.
The news of the change in chairmanship comes as Interpath reports a strong performance for the financial year ending March 31, with revenues increasing by approximately 15% and operating profit quadrupling compared to the previous year. Overall revenues are projected to be £163.6m, with adjusted earnings before interest, tax, depreciation, and amortization of £46.3m.
Interpath has been expanding its international presence, with a workforce exceeding 900 employees. The firm has recently made changes to its executive leadership, appointing Mark Raddan as the new chief executive, replacing Blair Nimmo.
Additionally, Interpath has opened an office in Bermuda, acquired KPMG’s restructuring business in France, and enlisted industry veteran David Sawyer as a special advisor to facilitate its expansion into the US. The firm anticipates benefiting from higher UK corporate insolvency rates post-COVID-19 pandemic.
Among its recent engagements was acting as administrator for the pre-pack sale of CTD Tiles to Topps Tiles. A spokesperson for Interpath declined to comment on Sunday.