The moves comes as the FSA reveals that the network was running a 793,508 deficit against the regulator’s solvency measures.
Creditors voted to appoint HKM as administrator at a meeting on December 30 as they felt a third party would be better placed to investigate the sale to Thinc in October.
Members of the Network 300 Action Group, who represent the majority of the creditors, want to see the sale overturned and money returned to Thinc. They have asked liquidator John Harlow to investigate whether the sale was undervalued.
BDO denies any allegations of negligence but says it has informed its professional indemnity insurer of the possibility of a claim.
The FSA has published an extract from its warning notice of October 8, 2004, showing a discrepancy between its view of Network 300’s solvency and that reported by the company.
In its quarterly financial return for the period ending August 31, Network 300 reported an own-funds deficit of 71,036, a net current assets deficit of 268,985 and an expenditure-based requirement deficit of 123,337. But the FSA says after making adjustments to the own-funds calculation as required under its rules, the deficit was in fact 793,508.
The regulator says despite repeated requests and warnings, Network 300 failed to rectify these deficits.
Group 300 Action Group chairman Darren Kempster says: “We feel BDO would have a conflict of interest as a liquidator investigating its actions as an administrator in the sale of Network 300 to Thinc.”
BDO partner Tony Supperstone says: “The action group feel they can overturn the sale to Thinc and their action would be more effective if the liquidation was not carried out by the firm that oversaw the sale.”