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NEWS16 July 2013

Ipsos wants $100m back from Aegis over Synovate sale – Bloomberg

Europe Legal

UK — Ipsos has accused Aegis Group of inflating profits and failing to disclose tax and fraud probes at Synovate prior to its purchase by Ipsos in 2011, according to a Bloomberg report.

The suit, filed in April but released by the court this week, accuses Aegis of not paying share bonuses to Synovate staff in order to “artificially inflate” profits and of giving a misleading account of customer contracts.

In addition, Ipsos alleges that an investigation into fraud at Synovate’s Mexican business; accounting irregularities in Romania; and tax probes in at least three countries were not disclosed before the deal.

Aegis has refuted the allegations in its own court fillings, according to Bloomberg. Ipsos, which bought Synovate in 2011 for £525m, is looking to recoup as much as $100m from Aegis.

Ipsos had referred to “a disagreement with Aegis over contractual price adjustments” in its annual results, published in February, stating at the time that an “independent expert who was appointed in July 2012 has not yet submitted his conclusions”. It’s not clear at this stage whether the two issues are related.

In its results, Ipsos had noted that 2012 was a flat year. Revenues of €1.79bn were the same as the pro forma figures for Ipsos and Synovate the year before. Global CEO Didier Truchot said the company had lost market share, either from exiting certain activities or from lost client contracts. Major client relationships held firm, and in many cases actually grew. But, all said, Ipsos was over-optimistic in its growth expectations, according to Truchot.

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1 Comment

5 years ago

Kinda ironic timing, given the piece last week here. And weren't there more glowing quotes from Ipsos leadership for that? It's almost as if they say whatever one wants to hear, with little regard for consistency or insight...

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