hipgnosis songs fund auditor

The Amstelveen, Netherlands, headquarters of KPMG, the newly appointed auditor of Hipgnosis Songs Fund. Photo Credit: DennisM

Another day, another Hipgnosis Songs Fund (HSF) shakeup: After delaying the publication of its half-year earnings, the troubled songs fund has officially appointed a new auditor.

HSF revealed the new auditor, replacing PricewaterhouseCoopers (PwC), via a formal release today. The move has arrived following all manner of operational difficulties for Hipgnosis, chief among them investors’ rejection of a massive catalog sale and the fund’s continuation.

Notably, though, at the same annual and extraordinary general meetings where the latter votes took place, irked HSF shareholders also overwhelmingly supported the reappointment of PwC, which had been named auditor in 2019.

“TO re-appoint PricewaterhouseCoopers CI LLP,” reads the third ordinary resolution on which investors voted in October, “who have indicated their willingness to continue in office, as Auditor of the Company to hold office until the conclusion of the next annual general meeting of the Company in 2024.”

All told, 98.23 percent of cast votes favored keeping PwC on board, according to the meetings’ results. But in late November, amid a decidedly significant planning process as to the future of the company, and as a lawsuit filed by the liquidators of a defunct Hipgnosis entity was heating up, HSF disclosed a tender process for a new auditor.

PwC, having evidently rethought the matter between the late-October investor votes and HSF’s late-November announcement, had “indicated they will not be participating in the tender,” Hipgnosis made clear at the time. The songs fund further communicated that it would “confirm the new auditor in due course.”

Now, as initially mentioned, the entity has finalized this due-course decision, tapping another “Big Four” accounting firm, KPMG, as auditor “with immediate effect for the financial year ended” March 31st, 2024.

At another general meeting “to be convened in due course,” investors will have the chance to vote on the appointment of KPMG, referring specifically to KPMG Channel Islands Limited, HSF noted. While the precise timing associated with this vote remains to be seen, far more urgent is the current late-April deadline for HSF’s board to submit proposals for the future of the songs fund.

Ahead of this cutoff, which could conceivably be delayed with the approval of investors, December has seen Hipgnosis Songs Fund appoint a veteran activist investor to its board and sell the rights to some 20,000 songs at a steep discount. When the market closed today, HSF stock (LON: SONG) was worth about 71 pence per share.