The Tribune

By YOURI KEMP

A BAHAMIAN accounting firm whose work was “misrepresented” to conceal an alleged fraud, according to US federal regulators, is leaving its parent network to merge with another local office.

The Grant Thornton branch in The Bahamas is to close down and merge with Baker Tilly Gomez as of November 1, said Paul “Andy” Gomez, chairman of Grant Thornton Bahamas.

The news came in a communication from Grant Thornton Global, which announced: “Grant Thornton International Ltd can confirm that Grant Thornton Bahamas will be leaving the global network on 31 October 2019. We wish the firm all the best in their future endeavours.”

When quizzed by Tribune Business, Grant Thornton Global chose not to go into the details behind the closure, except to say: “We are actively managing the network to ensure we have the capabilities and resources we need and that our clients expect us to have, in markets around the world. We have the capabilities in our network to continue to meet the needs of our clients in this market.”

Mr Gomez confirmed the move, adding: “Some time ago we resigned from Grant Thornton Global. We actually resigned from the firm because my brother and I started a firm called Gomez and Gomez and at the time we represented a firm called Summit International that later became Baker Tilly.

“What we decided to do over the last nine months to a year is determined that it would probably be best to join the forces of about 60 staff members with four partners. Look to the future and to make sure the firm has diverse clientele. So what happens to one person does not affect the continuity of the firm or operations.

“We have decided I will become co-chairman of Baker Tilly and my brother, Craig ‘Tony’ Gomez, will be the managing partner. The firm will now be comprised of four partners: James Gomez, Shando Rolle along with Craig and myself.”

Mr Gomez added: “Baker Tilly and Grant Thornton clients are virtually the same, we serve a lot of mutual funds and other financial services clients. So what we are doing is simply changing the name. I have not heard of any client that has an issue. This is just a name change.

“What is different between us and the big four is that in the the big four you have to retire at a certain age. But because we are owners of Baker Tilly there is no mandatory retirement age.

“I represented the firm Grant Thornton since I was in my 30s. Grant Thornton is a good firm, but we are excited about the new chapter.”

Mr Gomez denied the split from Grant Thornton Global had anything to do with the recent Securities Exchange Commission (SEC) matter. The SEC said the principals behind Mediatrix Capital falsely branded Grant Thornton’s “accuracy checks” on its trading performance as an audit conducted to international standards.

This, the US regulator claims, was designed to reassure investors Mediatrix was delivering promised returns of up to 150 percent and disguise the “misappropriation” of $41m to finance its principals’ lavish lifestyles and personal expenses.

He said: “We had resigned from Grant Thornton Global some two months prior to the SEC issue coming to light.”

Mr Gomez went on to say these kinds of issues with the SEC are “par for the course” for public accountants.

Mr Gomez made clear to Tribune business that public accountants are managed by standards, adding that the SEC matter was a “huge misunderstanding” and he “does not know what Mediatrix was trying to accomplish”.

Mr Gomez said they carried out two pieces of work for Mediatrix. One was an audit of a fund of that client, Mediatrix Capital Fund. He said Grant Thornton Bahamas qualified the fund based on auditing standards that were applied and “found that there was nothing wrong”.

“With the Mediatrix Capital Fund, we qualified it, but the company was not pleased with the qualification and they said they would change auditors. Grant Thornton Bahamas never performed an independent audit,” said Mr Gomez.

“Every other firm in Nassau, every partner in every one of those firms would have done what we did.”

Mr Gomez added: “The second engagement was a reclassification of statements for Mediatrix Capital Inc, which we were basically reviewing broker statements and reviewing some of their mathematical equations and that’s it.”

Grant Thornton Bahamas never audited Mediatrix Capital Inc, Mr Gomez said. He said: “We never audited that at all. But again it was simply a review of their accounting practices and broker statements.”

Mr Gomez added: “We specifically stated that this was not an audit. The report was for management purposes only, and they had to get specific instructions from us to share the details with anyone else.

“What we did for Mediatrix Capital Inc did not rise to an independent audit.”

Grant Thornton Global did not comment on the reasons for the Bahamas office leaving their network.