Deloitte faces tribunal over MG Rover
Nearly seven years after MG Rover Group collapsed owing an estimated £1.4bn, auditor Deloitte and one of its former corporate finance partners, Maghsoud Einollahi, have been issued with a formal complaint from the Accountancy & and Actuarial Discipline Board (AADB).
An independent Disciplinary Tribunal will be appointed to assess the complaint alleging that Deloitte and Einollahi fell short of the standards expected of ICAEW members by failing to act according to the institute’s professional guidelines on objectivity and due care.
The firm’s involvement in the failing car firm’s sale was compromised by conflicts of interest as it advised the Phoenix Four bidding for MG Rover while maintaining client relationships with the company. According to the AADB, it also failed to consider the public interest or recognise the potential different commercial interests between the Phoenix Four, MG Rover Group and associated companies and shareholders.
The AADB did not allege misconduct in relation to the Deloitte’s audit work, for which the accounts showed it received £2m in fees from 2000-2003. During the same period, it earned another £12.1m in non-audit fees.
The AADB investigation was first announced in August 2005, but put on hold pending the outcome of a DTI inquiry, which published its 850-page report in September 2009 (many of the relevant chapters have been withheld from the version in the National Archive).
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