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RICS finance controversy - new allegations made by newspaper

The Sunday Times has made new and detailed allegations regarding the Royal Institution of Chartered Surveyors.

For some weeks the newspaper has been carrying stories suggesting dissent within RICS over a report by independent accountancy firm BDO, which said RICS was at risk of “unidentified fraud, misappropriation of funds and misreporting of financial performance.” BDO’s report gave the lowest possible “no assurance” rating for the effectiveness of RICS’ financial controls. 

Now the newspaper has given more detailed allegations about events at the 152 year old institution, which issues a widely-regarded monthly housing market report and is portrayed as being the authority on standards and qualifications in the world of surveying and some aspects of residential and commercial property.

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The Sunday Times says the BDO report - which came out in late 2018 - was raised in 2019 by four RICS non-executive directors who wanted the organisation to respond to its criticisms. The newspaper says the four had not been shown the report but had “got wind of it” through other means.

The newspaper alleges that the then-president of RICS - Chris Brooke, a director of Hong Kong property firm Link - terminated the appointments of the four non-execs, accusing them of being “passive aggressive” in their tone.

At that time the organisation’s finances were in a difficult position. The Sunday Times says in 2019 RICS made a pre-tax loss of £4.7m on £91.3m of income from fees and commercial activities. It spent £13.2m on “gaining influence and building brand profile.” It has since that time made 140 people redundant. 

Also in 2019, Sean Tompkins - chief executive of RICS since 2010 - was paid £510,000 including £250,000 in bonuses: he also holds other positions in the property industry.

The Sunday Times says the unravelling of the controversy, led by whistle-blowing insiders, means that “RICS, which tells its members to be ‘honest and straightforward’ and ‘open and transparent’, faces awkward questions over its own behaviour.” 

It says some large agencies - most commercially-focussed - who bankroll much of RICS are now questioning the organisation’s value.

And the paper concludes: “Brooke [former RICS president and now chairman of its governing council] having ousted the NEDs, now finds his position under threat, as does [chief executive] Tompkins.”   

  • Algarve  Investor

    Interesting. I always automatically associate RICS with good practice, trustworthiness and stability, but if these accusations have any merit - as they appear to do - it could cast a cloud over an institution which has mostly been seen as a force for good, and one of the most trusted, if not the most trusted, in the property industry.

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