The directors of the suspended £117m Axiom Legal Financing fund have caved in to pressure from shareholders to replace KPMG as receiver of the fund with Grant Thornton.
In a letter to shareholders seen by IFAonline, the fund's directors stated that they continue to believe that KPMG is the appropriate party to act as receiver of the fund, and that "all the arguments against the appointment of KPMG have little or no merit".
However, they have agreed to recommend Grant Thornton to the court instead as they had become aware - via law firm Harneys, which represents some investors - that most shareholders support the view KPMG is not the appropriate firm to act as receiver.
Questions have been raised over KPMG's independence in the matter. Grant Thornton has also provided indicative fees for the receiver appointment that are generally 20% lower than those provided by KPMG, according to the letter to shareholders.
The letter also stated that one of Harneys' clients has agreed not to present a petition to wind up the fund at this time and instead to support the application to have a receiver appointed for the fund at the adjourned hearing on 31 January and 1 February 2013.
In court documents filed last December, KPMG said the managers of the suspended Axiom Legal Financing fund carried out "little or no due diligence" on the cases in which they invested shareholders' money.
KPMG's investigations also "reveal grounds for suspecting there has been mismanagement" of the fund's assets, and that the net asset value of the fund has been "overstated".
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