The board of accountancy firm RSM has made a push to consolidate its power, by taking control of almost all shares in the firm through a buyout of its former partners.
The shareholder buyout comes after RSM shareholders launched a coup against the accountancy firm’s ex-board in 2020, following the discovery an almost £10m hole in the auditor’s accounts.
The move is set “strengthen the firm’s ability to execute long-term strategy, and to facilitate an exit route for those retired partner shareholders,” an RSM UK spokesperson told City A.M.
In contrast to most large accountancy firms, RSM is structured as a company instead of a partnership, meaning former partners have historically held onto their shares in the firm giving them influence over decision making.
As such, the buyout is set to strengthen the position of RSM’s new management team, in giving them control over 95 per cent of all shares in the UK’s seventh largest accountancy firm and taking control away from the company’s former partners.
The buyout saw 215 former RSM partners sell shares back to the auditor, as the group handed over more than 90 per cent of all shares they own.
The consolidation of RSM’s shares in the hands of the company trust and currently working partners comes after investors ousted the entirety of RSM’s board in 2020.
“The share buyback forms part of the Board’s commitment to continue to create sustainable value and growth,” the spokesperson said.
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