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Grant Thornton faces action on two legal fronts

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30th Jul 2014
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Top five accountancy firm Grant Thornton could be facing legal action on two fronts.

When businessman Vincent Tchenguiz won £3m in damages from the Serious Fraud Office for false imprisonment and malicious prosecution on Friday, the first thing he did according to the Daily Telegraph was issue a statement threatening to bring a private prosecution against those who he felt were responsible for the botched investigation.

According to the Telegraph, Tchenguiz claimed the SFO had “outsourced” its investigation to Grant Thornton and in spite of potential conflicts of interest, its report contributed to his arrest.

In 2012 the High Court set aside SFO search warrants that had been used in raids on Vincent Tchenguiz and his brother Robert arising from loans they had taken out with the failed Icelandic bank Kaupthing.

On 25 July, the SFO announced it had agreed to pay Tchenguiz £3m plus costs - roughly another £3m - to settle his claims.

SFO director David Green commented: “I am pleased that we have been able to resolve this matter without the need for a costly trial. The SFO deeply regrets the errors for which we were criticised by the High Court in July 2012. On behalf of the SFO I apologise to Mr Tchenguiz for what happened to him. The SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated.”

When contacted by AccountingWEB, a spokesman for Vincent Tchenguiz said his lawyers were evaluating the options for legal action against third parties including Grant Thornton. 

Grant Thornton, meanwhile, responded: “Grant Thornton has acted appropriately, and in accordance with its professional responsibilities and legal obligations, throughout. Any disclosure made has been accurate and in accordance with those professional and legal obligations.

“It is the responsibility of the investigating agency to review and interpret any information provided to it, and to act as it sees fit. Grant Thornton did not act as advisor to the Serious Fraud Office.”

Of more immediate concern to the firm is a libel action from the Care Quality Commission (CQC) that goes back to a 320-page report prepared by the accountancy firm last year into shortcomings at the University Hospitals Morecombe Bay NHS Foundation Trust.

According to Health Services Journal, the former deputy chief executive of the CQC, Jill Finney is suing the commission for £1.3m in damages resulting from libellous allegations in the Grant Thornton report. As a protection against losing this case, the CQC itself has made a claim against the firm for any damages and costs caused by its report report.

Both Finney and the former CQC chief executive Jill Bower were forced to resign from their posts following enquiries into the commission led by the Commons Health select committee. They now run a consultancy offering reputation management services to public sector clients.

Finney outlined the key points of her case in written evidence presented to the select committee in 2013 describing how Grant Thornton’s report turned an allegation by one person that she had instructed the deletion of a report critical of the CQC’s regulation of the Morecombe trust.

On this issue, the firm commented: “Grant Thornton fully supports the validity and accuracy of the detailed report we produced for the Care Quality Commission, believing it to be a true and accurate reflection of our findings following the in-depth investigation we were commissioned to undertake.”

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