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US partner expressed concerns over Topshop statements

An American private equity partner of Sir Philip Green expressed concerns over the accuracy of financial statements from Topshop provided for due diligence.

A leaked email reveals that John Danhakl, managing partner of buyout firm Leonard Green & Partners, told colleagues he was ‘struck and troubled’ by the consistency of Topshop’s results before Leonard Green bought a 25% stake in 2012, according to the Sunday Times.

The email has been published in a new biography of Green by journalist Oliver Shah. 

Danhakl expressed concerns about the level of financial detail Leonard Green was given and that Topshop customers were increasingly buying fewer items per transaction.

Andrew Goldberg, general counsel for Leonard Green, told the newspaper that the email had been taken out of context and showed how the firm’s partners engaged in “rigorous, thorough, honest debate” before making investments.

Green said that Leonard Green carried out ‘very detailed due diligence’ before acquiring its stake in Arcadia.

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