Kuflink Audit, EY Resign and 2021 Performance

Kuflink is a renowned name in the peer to peer community. The firm is known for its consistent performance even through the turbulent times of the pandemic. However, the peer to peer lending platform came into the news for the wrong reasons. The firm’s auditor Earnest and Young resigned, citing that the firm has poor Kuflink governance, among other issues.

Before talking more about the Kuflink audit and related issue, let’s have a quick overview of the firm.

When was Kuflink established?

Kuflink started in 2016. Since then, the firm has lent more than £121 million. However, Kuflink had been operating since 2011 and had been lending bridging loans.

What makes Kuflink different?

Loans offered by Kuflink fill in the space between development and bridging with regards to risk. The firm has a good record that shows a low proportion of loans that have gone bad and an excellent recovery rate for bad debt.

Another unique thing about the platform is that it takes the first 5% loss on every loan in the manual lending account ‘Select-Invest’. There is another product called ‘Auto-Invest’ where the strategy is to move lenders to a new loan in case the other loan is going wrong.

As a result of all these facts, the lender has had zero losses, and the firm has built a reasonable loan history.

Do Kuflink’s Key People have Valuable Experience?

Kuflink is a family business having decades of experience with bridging loan. So, the firm has sufficient experience to perform lending operations. Kuflink has a profitable record of lending since 2011. It has a mix of individuals with great experiences in development, bridging and property surveying, and has been able to get satisfactory results in its peer to peer loan book, both in loan performance and recovery of bad debts.

Kuflink Audit and EY Resign in 2021

According to the records on Companies House, Earnest and Young cited in their letter that Kuflink has much work to do to improve some aspects of its business. But there was no suggestion of wrongdoings by the platform. The letter highlighted that the firm had inadequate governance, record keeping and business oversight.

In response to the Kuflink issue highlighted by EY, the firm’s CEO Narinder Khattoare said, “we have already successfully worked through many of the issues highlighted by EY, and some are still being addressed with our new auditors.”

“I also would like to clarify that none of the mentioned issues has ever compromised our investors’ funds.”

“The firm had started collaborating with our new auditors MHA MacIntyre Hudson on the issues highlighted before Earnest and Young withdrew formally, and this was communication to the Financial Conduct Authority online.”

EY resignation letter also pointed out that their audit for February 2021 had an ‘except for qualification’ for Kuflink VAT.

In response to this, the CEO continued, “with regards to VAT, Kuflink has been in contact with the HMRC since September of 2020, as the COVID-19 outbreak slowed down the early contact.”

“The firm has set aside the amount for VAT, and we will settle it by the set deadline of 2021 June by HMRC”, He continued.

“Kuflink is in a very good shape and strong position. Our losses have narrowed to a point where we are confident that we will soon announce a profit or breakeven.”

“As far as our investors are concerned, so far £121m has been lent on our platform, and so far, no investor has lost their funds.”

“During COVID-19, we paid back £25m, and a total of £73m in capital and interest has been paid back to the investors.”

“Overall, Kuflink is good health, and we look forward to strong inward investments this year and beyond.”

About Ambika Taylor

Myself Ambika Taylor. I am admin of https://hammburg.com/. For any business query, you can contact me at ambikataylors@gmail.com