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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: APRIL 27, 1999
DATE OF EARLIEST EVENT REPORTED: APRIL 20, 1999
STIRLING COOKE BROWN HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)
BERMUDA 000-23427 NOT APPLICABLE
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
VICTORIA HALL, THIRD FLOOR
11 VICTORIA STREET
HAMILTON, HM 11, BERMUDA
(Address of principal executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (441) 295-7556
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
On April 20, 1999, KPMG Peat Marwick ("KPMG"), the independent
auditors for Stirling Cooke Brown Holdings Limited (the "Company"),
notified the Company that KPMG would not seek re-election as auditors to
the Company for the year ending December 31, 1999 at the forthcoming Annual
General Meeting.
KPMG's reports on the Company's financial statements for each of
the past two years did not contain an adverse opinion or a disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope,
or accounting principles.
During the Company's two most recent fiscal years, and the
subsequent interim period preceding KPMG's declination, there were no
disagreements between the Company and KPMG on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope
or procedure which, if not resolved to the satisfaction of KPMG, would have
caused KPMG to make a reference to the subject matter of the disagreement
in connection with KPMG's report.
During the Company's two most recent fiscal years and the
subsequent interim period preceding KPMG's declination:
(a) KPMG did not advise the Company that the internal controls
necessary for the Company to develop reliable financial statements do not
exist;
(b) KPMG did not advise the Company that information has come to
KPMG's attention that has led it to no longer be able to rely on
management's representations, or that has made it unwilling to be
associated with the financial statements prepared by management;
(c) (1) KPMG did not advise the Company of the need to expand
significantly the scope of its audit, or that information had come to
KPMG's attention during such period that if further investigated may (i)
materially impact the fairness or reliability of either a previously issued
audit report or the underlying financial statements, or the financial
statements issued or to be issued covering the fiscal periods subsequent to
the date of the most recent financial statements covered by an audit report
(including information that may prevent it from rendering an unqualified
audit report on those financial statements), or (ii) cause it to be
unwilling to rely on management's representations or be associated with the
registrant's financial statements; and (2) KPMG did not so expand the scope
of its audit or conduct such further investigation;
(d) (1) KPMG did not advise the Company that information has come
to KPMG's attention that it has concluded materially impacts the fairness
or reliability of either (i) a previously issued audit report or the
underlying financial statements, or (ii) the financial statements issued or
to be issued covering the fiscal period subsequent to the date of the most
recent financial statements covered by an audit report (including
information that, unless resolved to the accountant's satisfaction, would
prevent it from rendering an unqualified audit report on those financial
statements), and (2) KPMG did not advise the Company that due to KPMG's
declination to seek re-election, or for any other reason, accounting issues
have not been resolved to KPMG's satisfaction prior to declination to seek
re-election.
The Company has provided KPMG with a copy of this report and has
requested KPMG to furnish the Company with a letter addressed to the
Securities and Exchange Commission stating whether it agrees with the
statements made herein. Attached as Exhibit 16 to this Form 8-K is a copy
of KPMG's letter.
On April 27, 1999, the Company engaged Arthur Andersen LLP as
the Company's independent accountant. During the Company's two most recent
fiscal years and the interim period subsequent to the fiscal year ended
December 31, 1998, neither the Company nor any person on the Company's
behalf consulted Arthur Andersen LLP regarding either:
(i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion
that might be rendered on the Company's financial statements; and no
written or oral advice was provided to the Company that Arthur Andersen
concluded was an important factor considered by the Company in reaching a
decision as to accounting, auditing, or financial reporting issues; or
(ii) any matter that was the subject of a disagreement or a
reportable event, as those items are defined under Regulation ss. 229.304
(17 C.F.R. ss. 229.304).
ITEM 5. OTHER EVENTS
On April 28, 1999, the registrant will issue the press release
filed as Exhibit 99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
(16) Letter of KPMG regarding change in certifying
accountant.
(99.1) Press release dated April 28, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on behalf of
the undersigned hereunto duly authorized.
Dated: April 27, 1999
STIRLING COOKE BROWN HOLDINGS LIMITED
By: /s/George W. Jones
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George W. Jones
Chief Financial Officer
and Director
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EXHIBIT INDEX
Exhibit Description
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16 Letter of KPMG regarding change in certifying
accountant.
99.1 Press release dated April 28, 1999.
EXHIBIT 16
[KPMG Letterhead]
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street N.W.
Washington, D.C. 20549
U.S.A.
April 27, 1999
Dear Sirs/Madams:
We were previously the independent accountants for Stirling Cooke
Brown Holdings Limited (the "Company"). On April 20, 1999 we declined to
stand for re-election as the Company's auditors for the year ending
December 31, 1999 at the forthcoming Annual General Meeting of the Company
and under date of March 5, 1999 we reported on the consolidated financial
statements of the Company and subsidiaries, as of and for the years ended
December 31, 1998 and 1997.
We have read the Company's statements included under Item 4 of its
Form 8-K dated April 27, 1999 and we agree with such statements, except
that we are not in a position to agree or disagree with the Company's
statement that on April 27, 1999 the Company engaged Arthur Andersen as the
Company's independent accountant, or that during the Company's two most
recent fiscal years and the interim period subsequent to the fiscal year
ended December 31, 1998, neither the Company nor any person on the
Company's behalf consulted Arthur Andersen regarding either:
(i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial
statements; and no written or oral advice was provided to the
Company that Arthur Andersen concluded was an important factor
considered by the Company in reaching a decision as to
accounting, auditing, or financial reporting issues; or
(ii) any matter that was the subject of a disagreement or a reportable
event, as those items are defined under Regulation 229.304 (17
C.F.R. 229.304).
Yours faithfully,
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Exhibit 99.1
Contact: The Torrenzano Group
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Don Schuster or Ed Orgon
212-681-1700 Ext. 103/102
WEDNESDAY, APRIL 28, 1999
STIRLING COOKE BROWN TO EXPLORE STRATEGIC ALTERNATIVES;
ENGAGES ARTHUR ANDERSEN AS NEW INDEPENDENT AUDITOR
BOARD OF DIRECTORS SEEKS TO ENHANCE SHAREHOLDER VALUE
HAMILTON, BERMUDA, APRIL 28 - Stirling Cooke Brown Holdings Limited (SCBHF)
announced that it has directed management to engage an independent
financial adviser to explore alternatives that could enhance shareholder
value. The Company also announced that it has selected the international
accounting firm, Arthur Andersen, as its independent auditor for 1999.
Stirling Cooke Brown Holdings Chairman and Chief Executive Officer Nicholas
Mark Cooke stated, "As a public company, shareholder value is management's
paramount concern. In light of the recent decline in the market price of
our shares, we believe it is prudent to consider all of our alternatives.
We are in active discussions with highly-regarded financial advisers, and
we will be making an appropriate announcement very shortly."
ARTHUR ANDERSEN ENGAGED AS INDEPENDENT AUDITOR
The Company also announced that it has engaged Arthur Andersen LLP, as
independent auditor for fiscal year 1999. "We are very pleased to retain a
firm with Arthur Andersen's excellent worldwide reputation," Mr. Cooke
stated.
The Company was recently informed by KPMG Peat Marwick, of Hamilton,
Bermuda, that KPMG decided not to stand for reelection at the Company's
1999 annual meeting. "KPMG's reports on the Company's 1998 financial
statements were not qualified or modified as to uncertainty, audit scope,
or accounting principles," Mr. Cooke stated. "There are no disagreements
between the Company and KPMG on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedures."
"We had an excellent working relationship with KPMG, and we anticipate a
smooth transition and full cooperation between KPMG and the Arthur Andersen
team," he concluded.
Stirling Cooke Brown Holdings Limited is a Bermuda holding company which,
through its subsidiaries, provides risk management services and products
predominantly to U.S. based small- and mid-sized businesses, including
those seeking cost-effective alternatives to traditional commercial
insurance for certain of their risk exposures. In addition, Stirling Cooke
Brown arranges reinsurance for its products as well as for those offered by
independent insurance carriers and reinsurance companies active in the
workers' compensation, occupational accident and health, and casualty
insurance markets.
Statements in this press release which are other than historical facts are
intended to be "forward-looking statements" within the meaning of the
Securities Exchange Act of 1934, the Private Securities Litigation Reform
Act of 1995 and other related laws. While the Company believes such
statements are reasonable, the actual results could differ materially from
those currently anticipated. Factors and risks that could cause such
differences include, but are not limited to, the conditions in the workers'
compensation market, the availability of reinsurance, competition,
regulation, the outcomes of legal proceedings, and other factors. The
cautionary statements contained in Exhibit 99 to the Company's Form 10-K
for the year ended December 31, 1998, are incorporated herein by reference.
