Interpath chair to step down over Deloitte ‘audit conflict’

A former chair of one of Britain’s biggest auditors is to step down as chairman of Interpath, the independent advisory firm, because of a potential conflict of interest involving its private equity backer’s choice of auditor.

Sky News has learnt that Interpath, which has been engaged by billionaire Sir Jim Ratcliffe on his cost-cutting campaign since taking a stake in Manchester United Football Club, will announce this week that John Connolly is to leave.

Mr Connolly, who has chaired the company since it was formed in 2021, is to hand the reins to Tamara Box, a former managing partner at the City law firm Reed Smith.

Insiders said this weekend that Mr Connolly was stepping down because of the impending appointment of Deloitte as the global auditor of HIG Europe, Interpath’s private equity backer.

Mr Connolly retired as senior partner and UK chief executive of Deloitte in 2011, but continues to receive a pension from the firm.

One source said that he, Interpath and HIG had agreed that his departure would avoid any potential conflict of interest arising, and that HIG needed Deloitte to be conflict-free.

The move is not without irony, given that Interpath’s formation was triggered by KPMG UK’s disposal of its restructuring arm amid growing obstacles posed by conflicts between large accountants’ audit and consulting operations.

News of the chairmanship succession will come as Interpath reports a strong performance for its financial year ending March 31, with a roughly-15% increase in revenues and a quadrupling in operating profit over the previous year.

One person familiar with the results said they would show overall revenues of £163.6m and adjusted earnings before interest, tax, depreciation and amortisation of £46.3m.

Interpath has been steadily expanding its international network, with a workforce now numbering more than 900 people.

It recently announced a change in its executive leadership, with Mark Raddan replacing Blair Nimmo as chief executive.

The firm has opened an office in Bermuda – a key location for the global restructuring sector – and acquired KPMG’s restructuring business in France.

It also recently recruited David Sawyer, an industry veteran, as a special advisor to aid its expansion into the US.

Interpath also expects to benefit from UK corporate insolvency rates which are now higher than that seen during the COVID-19 pandemic.

Among its recent appointments was acting as administrator on the pre-pack sale of CTD Tiles to Topps Tiles.

A spokesperson for Interpath declined to comment on Sunday.