Stenn - Case Update

Jim Tucker, Joshua Dwyer and Kristina Kicks of Interpath Advisory, the joint administrators of Stenn International and Stenn Assets UK, have provided an update on their administration of the collapsed UK fintech, while major accounting firms are now being investigated in connection with their audits of the companies.

Stenn International and Stenn Assets UK were placed into administration in December 2024 on application by secured creditor HSBC Innovation Bank, which became concerned after US authorities unsealed criminal indictments in a money laundering case that referred to Stenn and its Russian founder and chief executive Greg Karpovsky. After conducting an investigation, HSBC discovered potentially suspicious transactions with large customers in Taiwan and Japan.

In their proposals in late January, the joint administrators did not comment substantively on the allegations, instead simply acknowledging press articles concerning potential irregularities prior to insolvency, and asking creditors to bring any relevant information to their attention.

In their most recent report, the joint administrators make no mention of the allegations, but do disclose that their investigations are ongoing. This includes reviewing information and documentation gathered from the companies, including images taken of electronic records, gathering information from banks and financial institutions where the companies held accounts, and reviewing the companies’ accounting data. They have not provided any substantive information so as to not prejudice their investigations.

Meanwhile, the Financial Reporting Council has reportedly launched an investigation into both Deloitte and Azets over their audits of Stenn. Interestingly, Azets took over as auditor after previous auditor EY resigned in 2018 due to concerns over related party transactions and management’s explanations regarding those transactions. Deloitte was brought on for the 2023 fiscal year.

Read the joint administrators’ latest report HERE.

HSBC is represented by Mayer Brown. The joint administrators have been assisted by Ashurst.