Link Group, a major provider of administration services to super funds, has restated its half year and full year financial report for 2023, after ASIC raised concerns about several “material misstatements” of its assets and settlement costs.
The regulator requested Link Group revisit its accounts for the sale of its British Link Fund Solutions (LFS) assets to Dublin-based Waystone, as well as provisions and expenses related to settlement with the UK Financial Conduct Authority (FCA).
The settlement was in relation to LFS’ involvement in the high-profile demise of the $6 billion UK investment fund, led by former financier Neil Woodford, in 2019. The FCA has helped broker a deal where Link will pay as much as £235 million ($436 million) in compensation to those affected.
The restatement has resulted in a $50 million increase in Link Group’s half-year statutory loss and a $169 million decrease in its full-year statutory loss in 2023, noting that its 2024 forecast for statutory profit and loss is reduced by $169 million due to the amendments.
“ASIC reminds preparers of financial reports that consideration should be given to adequacy of provisions for liabilities and valuation of assets,” the local regulator said in a statement. The case came after ASIC adopted a new integrated approach to conducting financial reporting and audit surveillances, focusing on the entire financial reporting chain.
In its annual report, Link Group said it services approximately 41 per cent of all APRA-regulated superannuation funds in Australia as of June 2022.
Its core Retirement & Superannuation Solutions (RSS) product has over 11.6 million superannuation and pension members across four jurisdictions, with Australian and New Zealand member numbers up 7.5 per cent year on year. RSS has also extended its partnership with funds including AustralianSuper, REST, AMIST and Prime Super in FY23.
However, the company has been feeling the heat from its startup rival, Grow Inc, which snatched one of the biggest RSS clients HESTA in June. Grow’s core product is known as the DLTA platform, which is built on a distributed ledger technology that provides extra data security.
Link Group’s share price has plummeted 84 per cent in the past five years.