Auditors raise questions about firm in Redwood Bank’s listing bid

The external auditors of a company that the financier Jonathan Rowland is using to try to bring his Redwood Bank on to the stock market have raised questions about the bulk of its revenues.
Accounts filed by R8 Capital Investments show that its auditors at RPG Crouch Chapman were unable to verify £306,000 of the £392,000 of revenues that the group reported for last year.
They warned that they could not “determine whether any adjustment to this amount was necessary” and therefore gave a qualified opinion of the company’s figures. This differs from an unqualified opinion, which auditors give to accounts they deem to have a clean bill of health.
It is a setback for R8, which is in the midst of a reverse takeover by the company behind Redwood, a specialist lender to businesses. R8 is London-listed but its shares have been suspended from trading ever since the Redwood deal was announced in October last year.
Redwood was co-founded by Rowland, 49, who also chairs R8, which is now a cash shell after shutting down its cryptocurrency operations in 2023. He is the second of eight children born to David “Spotty” Rowland, the property tycoon, Conservative Party donor, and friend of the Duke of York.
Like his father, Jonathan is an entrepreneur and he started the Hertfordshire-based Redwood with Gary Wilkinson, the bank’s chief executive, almost a decade ago. He is now seeking to list the lender through R8, although the transaction has yet to complete. R8 was previously called Mode Global but changed its name after it decided early last year to wind down its operations, which included its Fibermode business, in the face of “challenging” conditions in the cryptomarkets. The accounts show Fibermode generated £306,000 of revenues in 2023, the same sum highlighted by RPG Crouch Chapman.
In the auditors’ report within the accounts, RPG Crouch Chapman said: “As the group has ceased trading and closed a number of third-party accounts, insufficient third party records were provided to us in relation to our revenue testing.” This meant the auditors “were unable to satisfy ourselves by alternative means” income of £306,000 of revenues. They added: “We have concluded that where the other information refers to revenue or related balances such as accrued or deferred income, it may be materially misstated for the same reason.”
As with R8’s previous accounts for 2022, there was also a warning in the 2023 report that there was “material uncertainty” about the company’s status as a going concern. This was driven partly by the pending status of its deal with Redwood.
Redwood is part-owned by Warrington borough council, which invested £32 million in the lender in 2017, although it has since emerged that the council had suffered a big loss on its stake.
Separately, another lender backed by the Rowland family, the Luxembourg-based Banque Havilland, had its licence revoked by the European Central Bank in August. The move followed years of scrutiny of the private bank by regulators.
R8 and RPG Crouch Chapman were approached for comment.