In November 2017, the German automaker announced it was selling off its automotive division, a move that had already been criticised by the UK government.
Porsche had been in the process of restructuring its business to make it more sustainable, with a focus on electric vehicles.
But in April 2018, the automaker revealed it had made a series of major missteps in its financial reporting.
The biggest was that Porsche’s annual financial report did not accurately reflect the extent of its business.
Its latest annual report does not tell the full story, and it has not disclosed any financial details about its sale of its financial services division.
The Financial Conduct Authority (FCA) has now launched an investigation into the accounting errors, and in October 2018, it issued a warning to Porsche that it was breaking the rules.
In a letter to the company, the regulator said the company had “failed to disclose all relevant information” on its financial statements and that it had “not been diligent in ensuring that the information that it has disclosed is correct”.
“In the event of a regulatory investigation, we expect Porsche to take all necessary measures to ensure that it complies with the law,” it added.
The German automaking giant had previously admitted to mis-reporting financial data.
In December 2017, Porsche admitted to a “lack of transparency” in the way it reported its financial results.
The firm had also previously said it was not responsible for the losses it had incurred in the US market, despite having been fined for violating anti-trust rules.
The FCA’s investigation has also been examining the financial reporting of other car companies in the UK.
The regulator said it is currently reviewing a separate investigation into Porsche’s tax affairs in the country.
Porsche has also come under fire from the British government over its handling of the Brexit vote, which it blamed on “lax” financial reporting in the U.K. The company’s UK tax affairs have also come into question.
In April 2018 the British Parliament announced it would hold an inquiry into the company’s tax practices after it found the automaking company had not properly reported some of the benefits it received in the Brexit negotiations.
“We do not believe Porsche should have been given any preferential treatment over other companies when it comes to the tax affairs of its subsidiaries, or any other subsidiary that it is directly or indirectly owned or controlled,” Prime Minister Theresa May said at the time.
Porsche and its UK arm have also faced criticism in the past for failing to pay their workers, particularly on the assembly line.
The automaker is not the only one to face criticism for its financial accounting.
In November 2016, the Financial Times reported that Tesla Motors had made significant misstatements in its 2017 financial report, including one claiming that the automakers electric vehicles were worth more than they actually were.
The newspaper claimed Tesla had failed to properly count its revenue from electric vehicle sales, which was around £20 billion, and was “sitting on” around £25 billion in cash, as well as a shortfall of around £8 billion in the company itself.
Tesla also failed to make an accurate calculation of its profits, as it did not include its electric vehicle division, the Post reported at the point.