KPMG Fined $100 million for Role in Collection Agency Bankruptcy

By Doug Mellgren, AP

The Norwegian branch of international accounting group KPMG LLP was ordered to pay 656 million kroner ($100 million) in damages Friday after one of Norway’s worst bankruptcies. The company said it will appeal.

The Oslo district court found that the group had been negligent in auditing the books of Finance Credit, which went bankrupt in 2003 owing about 1.3 billion kroner ($200 million) to eight banks.

The court said that as the auditor, the firm had a duty to ensure that Finance Credit’s books accurately reflected its finances, and ordered KPMG to compensate creditors through the defunct company’s bankruptcy administrator.

Finance Credit offered collection agency services, which means it bought unpaid debts from other companies, then sought to collect the funds plus fees.

One of its founders, Trond Kristoffersen, was sentenced to nine years in prison and ordered to pay 1.2 billion kroner ($185 million) in damages for fraud, hiding assets and accounting violations.

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