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Deloitte's MG Rover fine slashed

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14th Apr 2015
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A £14m fine levied against Deloitte in its role as adviser to MG Rover has been cut to just £3m on appeal, according to the Financial Reporting Council (FRC).

Former Deloitte partner Maghsoud Einollahi has also had his fine reduced by £75,000 to £175,000.

Negotiations between the parties are currently underway regarding the level of costs.

Back in September 2013 a record £14m fine was imposed on the Big Four firm along with a severe reprimand.

The FRC tribunal found the firm and Einollahi had failed to consider the public interest and a potential conflict of commercial interests between the ‘Phoenix Four’ who had bought MG Rover, the group and various associated companies and shareholders.

As a result the tribunal excluded Einollahi from the profession for three years and fined him £250,000.

Deloitte appealed and on 30 January 2015 an appeal tribunal cleared Einollahi and Deloitte of eight charges relating to deliberate professional misconduct, but upheld five findings related to aspects of Deloitte’s client engagement processes.

It upheld several findings of misconduct in relation to Deloitte’s work on ‘Project Platinum’, the project to dispose of the MG Rover loan book and granted the appeal against other findings including those in relation to ‘Project Aircraft’, the project to realise the value of tax losses within MG Rover Group.

The appeal tribunal also found that the misconduct by Deloitte was not deliberate.

Einollahi’s exclusion was rescinded and both he and the firm received a severe reprimand.

Last week PwC, acting as administrator of MG Rover during this debacle, said it hoped to return at least £56m more to creditors 10 years after the company's collapse.

The firm said it was pursuing a number of claims which could lead to further recoveries for unsecured creditors.

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By carnmores
15th Apr 2015 19:46

Funny that

you never hear about them going upon the grounds that they were too small

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