High street fashion retailer Ted Baker has appointed Freshfields Bruckhaus Deringer to conduct an independent review into the company’s finances, after the board discovered that it had overstated its balance sheet.

Ted Baker said in a trading statement on the London Stock Exchange this morning that the Magic Circle firm will “undertake a comprehensive review of this issue”, adding that the Ted Baker board “estimates an impact on value” of between £20 million and £25 million.

Freshfields will report to a sub-committee chaired by independent director Sharon Baylay  throughout the review process, the statement continued.

The firm is fielding its London global investigations co-head Ali Sallaway and corporate partner Chris Mort to lead the Freshfields team.

Last December, Ted Baker called in Herbert Smith Freehills to conduct an investigation into alleged harassment and inappropriate behaviour by company chief executive Ray Kelvin.

Kelvin resigned from the company in March this year, a month before HSF finished its review into the company’s processes and policies.

According to a statement on the LSE released earlier this year, HSF made a series of recommendations for Ted Baker, including that it renew training for its employees on HR procedures and acceptable workplace conduct, and maintain an independent and confidential whistleblowing hotline.

Last year, Freshfields was called upon by UBS to conduct an independent review of the bank’s handling of a sexual misconduct internal investigation. The firm found that UBS made “no fundamental errors” in its investigation into the allegations that a female trainee had been raped by a male colleague.