LOM (Holdings) Limited is asking shareholders to consider appointing a Mellville, New York based firm as the company?s auditors for the ensuing year. LOM, which trades on the Bermuda Stock Exchange, advised shareholders in a legal notice yesterday that the appointment of Marcum & Kleigman LLP would be up for consideration at a special general meeting next Thursday.

The legal notice follows a letter addressed to shareholders earlier this year in which auditor PricewaterhouseCoopers said that is was unable to form an opinion on LOM?s 2003 financial figures due to legal investigations and inquires. LOM is being investigated by the US Securities Exchange Commission for alleged securities fraud involving Sedona Software Solutions Inc., SHEP Technologies Inc and HiEnergy Technologies Inc. LOM and Scott Lines are due to appear before a US District Court this Friday to show why they should not be ordered to comply with four subpoenas that were served in April 2004 in relation to requests for information relating to trading in the shares of these companies.

Last month, the company?s lawyers also appeared before a British Columbia Securities Commission hearing to defend LOM and some of its executives for alleged non-compliance in a securities investigation. The decision in that case is pending. Auditor PricewaterhouseCoopers said in its July 13 letter to shareholders that while it conducted the audit of LOM?s financial statements in accordance with generally accepted standards, it had been informed of ?certain regulatory investigations and enquiries? from which the Company may ?become liable to monetary fines or other regulatory action.?

PWC wrote: ?The Company?s [LOM?s legal counsel has advised that full access by us to all information would constitute a waiver of attorney/client privilege and such a waiver is not in the Company?s best interests. Because of this we have been unable to obtain sufficient appropriate audit evidence to form an opinion with respect to the possible impact of any such matters on the consolidated financial statements.?

?In view of the possible material effects of the matters to the financial statements, and our inability to form an opinion with respect to their effect thereon, we are unable to express an opinion whether these financial statements present fairly the financial position of the Company as at December 31, 2003 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in Bermuda and Canada.? asked yesterday whether PWC?s letter had anything to do with the firm?s decision to look for auditors overseas, but a LOM spokesperson only said via e-mail:

?Marcum & Kleigman have significant expertise in the financial services industry, including auditing broker-dealers and fund management companies, and the LOM Group feels that it would be beneficial to use the services of a firm with this experience. Marcum & Kleigman are based in the United States, however have offices in Grand Cayman and already do work in Bermuda.?