Fletcher confirms KPMG review of biggest projects

KPMG to review Fletcher projects. Photo/Brendon O'Hagan, Bloomberg

Fletcher Building has issued an NZX notice confirming speculation that consultants KPMG is reviewing its two biggest construction projects.

"Fletcher Building is aware of speculation that it has commissioned KPMG to review projects in the company's construction division. The company confirms that it has engaged KPMG to conduct a review of the two largest projects in its B+I business and the two largest projects in its Infrastructure business, to augment existing governance processes," the company said referring to its building and interiors division.

The company did not name them, but the two projects are thought to be the now-completed Christchurch Justice and Emergency Precinct and Auckland's $700 million NZ International Convention Centre for SkyCity Entertainment Group, a project which is now well under way.

Fletcher said there was nothing unusual about consultants being brought in.

"The company notes that it routinely uses a variety of external consultants across a range of disciplines within its businesses, including in the construction division. Fletcher Building remains in full compliance with its continuous disclosure obligations," the notice said.

The NZX announced in the winter that it was looking into Fletcher.

"NZX will be making inquiries into today's disclosures, given FBU's continuous disclosure obligations under the listing rules," NZX head of market supervision Joost van Amelsfort said in July after a profit downgrade.

Separately, in accordance with NZX's routine surveillance processes, "trading ahead of today's announcement will be assessed in detail. This is in addition to NZX's ongoing investigation into the disclosure of FBU's previous earnings downgrade in March 2017", the stock exchange said.

Fletcher's acting chief executive is Francisco Irazusta, while a hunt is under way for a new boss to replace Mark Adamson.

Last week, Fletcher announced the resignation of chief people and communications officer Kate Daley.

On September 20, it said directors John Judge and Kate Spargo would retire.

Fletcher's annual meeting will be at the Auckland War Memorial Museum's events centre on October 25 at 10.30am.