MP slams Lloyds-PwC ‘mafia’ for company theft

Parliament TV
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MP Austin Mitchell revived his age-old reputation as the scourge of the accountancy profession by laying into PwC, Lloyds Bank and the ICAEW during a parliamentary debate on the receivership of a company in his constituency.

Mitchell succeeded in calling the debate last week to tell the story of what he called “the theft of a profitable Yorkshire company by the mafia”, according to the Hansard report.

He continued: “I do not mean the criminal mafia that we often speak of, but Britain’s dark-suited mafia, which in this case is represented by Lloyds Bank and PricewaterhouseCoopers, both acting in collusion and neither of them subject to police controls, because both regulate themselves.”

The saga goes back to the 2008 receivership and sale of Premier Motor Auctions...

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18th Nov 2013 14:57

Not a 'scourge of the accountancy profession '

As a sole practitioner I who actively oposes Austin Mitchell's political party I do not see Austin Mitchell as a 'scourge of the accountancy profession'. He may be a scourge of the big firms and their cosy relationship with the accountancy bodies but this is a very different thing. He is correct to bring these matters to public attention and in the long run this will be to the good of the profession as a whole.

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03rd Dec 2013 12:05

well done austin mitchell-and of course margeret hodge!!

after all pwc is too big has too many ex anderson(like enron) clients who manufacture corporate earnings or hide tax earnings(amazon)(google) and they recent lost the unilever audit to kpmg- i would trust kpmg by far!

"As a sole practitioner I who actively oposes Austin Mitchell's political party I do not see Austin Mitchell as a 'scourge of the accountancy profession'. He may be a scourge of the big firms and their cosy relationship with the accountancy bodies but this is a very different thing. He is correct to bring these matters to public attention and in the long run this will be to the good of the profession as a whole."

[/quote]

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03rd Dec 2013 12:52

typical left wing politician

david5541 wrote:

after all pwc is too big has too many ex anderson(like enron) clients who manufacture corporate earnings or hide tax earnings(amazon)(google) and they recent lost the unilever audit to kpmg- i would trust kpmg by far!

"As a sole practitioner I who actively oposes Austin Mitchell's political party I do not see Austin Mitchell as a 'scourge of the accountancy profession'. He may be a scourge of the big firms and their cosy relationship with the accountancy bodies but this is a very different thing. He is correct to bring these matters to public attention and in the long run this will be to the good of the profession as a whole."

[/quote]

 

actually, NOT well done.  Lots of hot air, and a little air time to air his personal prejudices, but absolutely nothing that helps his constituent in any practical way.  

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03rd Dec 2013 14:10

agree.

listerramjet wrote:

actually, NOT well done.  Lots of hot air, and a little air time to air his personal prejudices, but absolutely nothing that helps his constituent in any practical way.  

hear hear

It didn't make any sense.

It was already covered by the Tomlinson report into Nat west/RBS

He doesn't understand who is responsible or who's got authority for what. In fact shouted about everyone but.

No help for his constituent as you say.

 

What he has done is create some media noise which might lead somewhere as nothing happens unless it is a press led enquiry.

That is why we need more cocaine snorting, party animal religionist nutters that eat to many pasties as leaders as they make good copy and occasionally a serious point might tag along in the hope of being noticed.

 

Still not heard of any police enquiry or has Mr Mitchell not reported it to his local Financial Intelligence Unit and followed up (it's the follow up that's important)

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18th Nov 2013 17:07

Say what you like about Austin Mitchell but,

from what's stated here, he's carried out his constituent's request as thoroughly as anyone could have asked for.

Regretfully, like many of us on here, even he's come up against a thunderous brick wall. For me this example has a typical rancid smell and I'm sure Mr. Mitchell would have the same suspicion.

What a peculiar place the UK is, when it comes to "justice" in the financial field. No one ever has their collar felt, do they?

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18th Nov 2013 20:22

over 300 failed banks in Europe

Zero qualified audit reports.

Well done ICAEW, you've flung out some hapless member who signed a document on behalf of a client and it went wrong.

But the real scourge of the accountancy profession - the Big 4 fat cats who think of the fee and sign off any old drivel - will never get so much as a reprimand.

Why?  Because they run the ICAEW, that's why.

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20th Nov 2013 13:34

ICAEW Liberty takers

Just another example of "Chartered Accountants" and yet everytime I complain about this I am assailed by members of the Institute who claim that they had to work so hard to get membership, have become legends in their own lunchboxes and know everything there is to know about everything.

The most dreadful accountants I have had the misfortune to work with have all been members of the ICAEW. It's just a licence to do the wrong thing and get bags of fees for it. Why does this organisation keep doing things which give accountancy a bad name?

They claim to be the top accountants. In which case, why act like a bunch of crims? Outrageous, it really is.

 

 

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20th Nov 2013 13:51

how does that work then Donald

Donald6000 wrote:

Just another example of "Chartered Accountants" and yet everytime I complain about this I am assailed by members of the Institute who claim that they had to work so hard to get membership, have become legends in their own lunchboxes and know everything there is to know about everything.

The most dreadful accountants I have had the misfortune to work with have all been members of the ICAEW. It's just a licence to do the wrong thing and get bags of fees for it. Why does this organisation keep doing things which give accountancy a bad name?

They claim to be the top accountants. In which case, why act like a bunch of crims? Outrageous, it really is.

 

 

How does that work then Donald? PWC may have acted within the ethical guidelines and may even have taken all the appropriate actions and made the correct reports. The result would still have been the same.

What criminal offence has taken place by PWC (the MP has parliamentary protection against defamation whilst in the house) and what exactly do you think the ICAEW powers are?

If the police (or HMRC) are not going to prosecute there clearly is no criminal offence and the ICAEW are powerless.

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21st Nov 2013 13:50

A wee bit of a generalisation

@Donald6000

 

A wee bit of a generalisation...

The vast majority of practising members of both ICAEW and ACCA are sole practitioners and/or small firms.

The culprits are the large firms, who for far too long have been hand-in-glove with government and Big Biz.

Naturally, co-ordinated and led by CCAB.

And it is in majority a progression of the from the FRC thru ASB and APB in cohorts with CCAB who fail to rectify the core problems.

Remembering, greater oversight and accountability were the core thrust of Cadbury; and executive restraint on remuneration (And stock options, golden parachutes et al) were expected to follow Greenbury.

Back in the late 1980s, when corporate insolvency became a growth industry, the top ten were seemingly in cohort: where one firm had held audit remit and a competing firm carried out the insolvency, no complaints were levied: mainly since it had become a sort of quid pro quo.

They were all tarred with the same brush.

After Enron and the US government invoking Sarbanes-Oxley, one might have hoped things would change and a new breath of real accountability and integrity might sweep thru the profession.

Considering Northern Rock and RBS as exemplars, then clearly nothing changed whatsoever: personally, I fail to comprehend how and why any auditor could have repeatedly signed off Northern Rock's and RBS's annual report and accounts as a clean going concern??

If anything, probity, due diligence and client's best interest have been utterly ignored in the dash for growth and profit.

 

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19th Nov 2013 07:29

There is probably a lot more of this goes one

Cheating, fraud, lining your own pockets .... some so called professionals are no better than thugs, but at least thugs don't hide behind a veneer of respectability or have the professional bodies as bed mates.

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06th Apr 2014 12:34

PwC

Shirley,

Many thanks for your comments which I am most interested in . You are obviously knowledgeable in this area and I would like to discuss a certain matter with you.

please call 07768 588200.

 

Best wishes

Keith Elliott

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By redboam
19th Nov 2013 08:45

Tic - Toc?

What stands out in this story is the "Tic - Toc" project, recommended by LLoyds in concert with PWC. If this is not an abuse of process withing the Insolvency and Enterprise acts it very much sounds like it ought to be.

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19th Nov 2013 09:40

.

This case was widely described in private eye. Smelt very rotten.

 

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19th Nov 2013 19:26

The Big 4
Are they are a bigger threat than the Big 4 in the Agatha Christie book of the same name? intent on world domination without a thought for anyone else?

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20th Nov 2013 11:42

remedy?

if the complaint is theft, then surely the appropriate authority is the police.  Mitchell seems to have given a long account covered by privilege, but has the chap who made the complaint raised this with the police?  Perhaps there might also be a case against the non-exec and the advice he gave.   What I find strange is the way an accountancy web site seems content to simply regurgitate the bilge from Mitchell under a salacious headline, but does not then dig down to the underlying facts.

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By hammoa
21st Nov 2013 03:56

You clearly have never dealt with the Police... "Sorry, sir. It's a civil matter! Take it up with your accountant and solicitor. We are too busy filing papers in triplicate to meet our annual quota of politically correct stop-and-search statistics, and the one cop left in Traf-Pol is churning out the speeding camera NIPs. We have a country to police don't you know? - Oy! Sicknote!, where are those donuts?"

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21st Nov 2013 09:29

Exactly

hammoa wrote:

You clearly have never dealt with the Police... "Sorry, sir. It's a civil matter! Take it up with your accountant and solicitor. We are too busy filing papers in triplicate to meet our annual quota of politically correct stop-and-search statistics, and the one cop left in Traf-Pol is churning out the speeding camera NIPs. We have a country to police don't you know? - Oy! Sicknote!, where are those donuts?"

Exactly why these things are allowed to happen.

This civil service culture of not doing anything useful for mankind needs to change. It is a disgrace and why Britain is failing.

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20th Nov 2013 11:43

The unfortunate case of the big 4

Why is this no longer a 'surprise' for anyone who is familiar with the dealings of these companies together with the other 'big 4' both on the high street and behind the administration mafia companies.

I wonder how many of the grunts were actually bulled up grads merely in place in order to provide a reason to invoice.

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20th Nov 2013 12:08

Remedy - response

I think that perhaps Mr Mitchell is using that medium to highlight the circumstances because under the law and the way it is applied currently there would not be any real likeliehood of redress. 

Surely the finacial crises taught us something.  The people responsible for it would appear to be more or less untouchable despite having lined their own pockets very luxuriously. 

Perhaps when Mario Puzzo wrote The Godfather he should have widened his definition of who can steal more money with a briefcase than one hundred men with guns.

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21st Nov 2013 12:15

Mitchell - the motive

AW is correct that Mitchell is a scourge of the accountancy profession - in that he likes to take regular potshots.  So his motive is fairly easy to guess.  But your main thesis I reject.  If a crime is committed then the criminals are certainly not untouchable.

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20th Nov 2013 12:10

Mr Mitchell or Ann Robinson rant

Sounds like an Anne Robinson rogue traders rant designed to reinforce the fact you can't do anything, once that belief has been established you have won the battle.

the loss making deal with the DVLA seems to have been the cause? Fancy doing risky business with the government. It is well known that they will pick the cheapest price and that in turn influences the need to employ illegals and evade/aggressively avoid tax in order to make the contract profitable.That is the advice that perhaps needs looking at.

If this was all planned as Mr Mitchel is intimating then it is fraud!!!!!! wake up plod, the insolvency service the BIS, Action fraud, used to be known as SOCA, Companies house, and all the other government filing agencies to discover they will not take any enforcement action because its not their Job.gov.

Wake up and smell the coffee Mr Mitchel MP. Who is in charge of all this?

It's a bit sad he does not know his own rules.

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20th Nov 2013 12:22

Hang on a Tic (Or ought that to be, Toc?):

Surely, PwC and the other biggies divested their practices of their consultancy arms, quite some years back. Indeed, PwC sold off the consulting division to IBM.

The reasons for such compelled divestment were constant conflicts of interests and best practice and due diligence being properly exercised when the major practices wore three simultaneous hats: viz, Audit, Insolvency and Consultancy.

Yet here we have, once again, precisely the same conflicts of interests and the client's best interest being sacrificed on the golden altar of profit and venality.

Interesting further good reading.......

http://articles.economictimes.indiatimes.com/2013-04-28/news/38862562_1_...

 

 

 

 

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20th Nov 2013 12:55

Big 4
The big 4 advice HMRC on policies. Very same advisers take up cases against HMRC to providing tax consultancy services to their clients.
No wonder big boys are doing well and looking after their own interest.

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20th Nov 2013 13:08

Insolvency Practice

This again raises the whole question of Insolvency Practitioners, their fees, their duties and responsibilities to creditors, indeed their whole ethics  ( or do they think  that is just a county east of London ?! ). The IPA and ICAEW and other accountancy bodies appear to have relinquished any form of control or censure over their members as regards IP.

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20th Nov 2013 22:34

Jack the lad

The IPA and ICAEW and other accountancy bodies appear to have relinquished any form of control or censure over their members as regards IP.

Could not agree more.

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20th Nov 2013 13:36

the insolvency service

The insolvency service and the BIS are the ones ultimately in control. It is they that decide cases of fraud should not be brought in the public interest even when these cases are reported by IP's they are rarely acted on. The problem of its not our job.gov is a national disgrace.

The IP could have reported suspected fraud to the insolvency service (the conflict of interest may have been that "we didn't see it as fraud" in case we didn't get paid or other cash deal).

If a fraud was suspected there would/should have been a SOCA report as well.

Whilst the professional bodies should be more active in maintaining the standards in the profession the failure to enforce the Law (rather than professional ethics) lies with the government.

This is an allegation of fraud, a matter in which the professional bodies have no jurisdiction. It is a matter for the police.......not our job.gov.

Surely they now have a duty to investigate whether a crime has been committed.

Looking forward to the Bain's case in January where I believe one of the defendants is the insolvency practitioner. That might lift the lid on the dark side of the insolvency world.

 

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20th Nov 2013 14:58

Next was the ICAEW, which Mitchell suggested should be renamed the “society for the prevention of cruelty to the Big Four accountancy houses”. It did not investigate Elloitt’s claims and said he should seek a judicial review, which is now out of time.

The ICAEW should be the society for ensuring members act ethically. But like other chartered bodies seems merely to exist to prevent claims against its members.

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20th Nov 2013 15:39

not quite

ver1tate wrote:

The ICAEW should be the society for ensuring members act ethically. But like other chartered bodies seems merely to exist to prevent claims against its members.

Not quite.

Has PWC actually done anything wrong here? ethically or otherwise.

I know that's going to upset the witch hunt.

As an MP Mr Mitchell should have some clue about how the country and the law's work, it is clear from watching the parliamentary accounts committee that they don't have the first clue.

Not persue, the throw some mud and hope it will stick method.

There are plenty of remedies available to his constituent but as far as I can see they are complaining to a body that has no powers in this regard.

If it is fraud then it is a criminal matter! = action fraud report and report to local police. S.9 fraud act, S.993 CA 2006 etc etc.

If it is a civil matter = find a good solicitor and sue for damages.

If it is a whiney "Miss look what he's done matter" = complain to the ICAEW

The ICAEW have already looked at this and decided they have no chance of getting a fine off the member concerned.

No one is going to answer what have PWC done wrong and what have the ICAEW done wrong. Why? Because there is no real case to answer !!!

 

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ICAEW's powers
totally disagree with your comment that just because there is no criminal or civil case in place, the ICAEW are powerless to act. An example of this is when they discipline a firm or members if they were not complying with issues such as PII or CPD requirements. There have adequately qualified and experienced staff who are capable of making good judgements on whether their members have behaved or acted in good faith, and complied with all matters contained in the members handbook, such as maintaining good ethics, independence, etc. ICAEW on thousands of occasions have been accused of not being independent of the big 4 and on numerous occasions, their actions or lack of them have clearly demonstrated this. Clearly with the major bank crisis, if no audit reports were qualified, surely this in itself ought to have raised enough concerns to review the quality of the auditing standards and work carried out by big 4 firms, or for that matter, their dependency on the audit fees, consultancy fees, and receivership fees leading to clash of interest and lack of independence. Even where there has been proven cases of major shortfalls in the breach of ethics and standards, leading to substantial losses, these big firms have been let off with light smack, for them to then continue with whatever mal practices. If ICAEW wants credibility, and their vast majority of members (over 97%) are credible enough, then for the sake of the majority of members, they ought to learn to police themselves and dish out severe punishments for any major wrong doings by those minority members (even if they represent the top 4), for it is such high profile cases (where millions are lost by innocent parties)that devalues the ICAEW's and the majority of its innocent members reputation. To spend its huge limited resources on disciplining members for lesser matters, such as overlooking to update their CPD records is fine, but in all honesty, the ICAEW president ought to round up the most senior staff into seriously looking into serious concerns expressed, such as this one. If the ICAEW choses to wake up after such cases goes to the Courts, then by their lack of prior enquiry and action, the damage to the profession is already done. Everyone expects the ICAEW to be able to regulate its own members and member firms, without reliance on the Courts.

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17th Jan 2015 23:45
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20th Nov 2013 16:34

Nothing has changed:

No 5 is stll the worst.

http://visar.csustan.edu/aaba/heritage.html

How much is their brilliant work with the SFO and Tchenguiz going to cost the taxpayer?

 

 

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20th Nov 2013 18:43

Stupid is what stupid does

Lets have a look at the mistakes made by Keith Elliott

He used Lloyds Bank as his funder, why not spread the risk with other funders

He took an advisor from that bank as part of an agreement to lend instead of not borrowing or rebanking

Even worse one from a professional firm instead of an experienced business person I assume he interviewed several candidates and investigated their background?

Worse still he actually says he took advise from this person - was he not running the company?

He then lets the bank manipulate him into letting PWC and the bank carve up the company

Stupid is what stupid does !!

 

I see this and similar happen all the time - little sympathy I am afraid

 

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20th Nov 2013 21:56

Perhaps Mr Mitchell could look into Companies House?

As a practising accountant we have all had situations when companies have taken the £10 route to dissolution and thus getting rid of debt, usually to resurrect themselves in a different guise.  Fine, unless HMRC object.  Companies House will then halt the process.  Anyone else object? Tough titty!  Companies House just ignores you.  A case of one rule for rulers and their lackies and another for everyone else!

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28th Jul 2015 12:28

Companies House

Doigs of Greenock. Doigs of Glasgow. Same font.New name. 

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20th Nov 2013 22:42

The Black Knight

Would selling a bankrupt's asset to a connected third party for half what had been offered by a creditor be considered ethical and in the best interest of creditors?

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21st Nov 2013 09:24

Depends

ver1tate wrote:

Would selling a bankrupt's asset to a connected third party for half what had been offered by a creditor be considered ethical and in the best interest of creditors?

Depends on who the creditors are. Which in this case was ?........

The creditors do have a say in all this you know.

If any thing wrong had been done then the insolvency service should have taken an interest, as it is their responsibility not a professional body with no statutory powers.

Do you really want them to waste your fees chasing PWC over byelaws (a battle they will loose) that should have been done by HM Government using the appropriate measures set out by parliament. Or are MP's just at the top of not our Job.com

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21st Nov 2013 19:45

depends

The creditors do have a say in all this you know.

I wish you would tell that to the AIB and the ACCA

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24th Nov 2013 16:10

Depends on who the creditors are. Which in this case was ?........

The creditors do have a say in all this you know.

If any thing wrong had been done then the insolvency service should have taken an interest, as it is their responsibility not a professional body with no statutory powers. (But did not do so satisfactorily)

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This is a case where the creditor made an offer to buy the bankrupt's house for full value, and rather than raise a costly eviction order to evict the bankrupt's wife, offered to allow her to rent the property at a fair market value rent. However the AIB completely ignored this offer, and it was transferred to her at less than fair value, plus she was allowed some very dubious expenses which the AIB has stated that he is unsure about, and her solicitor has not yet given details of.

This case is by no means finished.

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25th Nov 2013 10:21

Then

ver1tate wrote:

Depends on who the creditors are. Which in this case was ?........

The creditors do have a say in all this you know.

If any thing wrong had been done then the insolvency service should have taken an interest, as it is their responsibility not a professional body with no statutory powers. (But did not do so satisfactorily)

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This is a case where the creditor made an offer to buy the bankrupt's house for full value, and rather than raise a costly eviction order to evict the bankrupt's wife, offered to allow her to rent the property at a fair market value rent. However the AIB completely ignored this offer, and it was transferred to her at less than fair value, plus she was allowed some very dubious expenses which the AIB has stated that he is unsure about, and her solicitor has not yet given details of.

This case is by no means finished.

Then you need to rattle the chains of government. Or persue a civil action. The ACCA cannot help you as it does not have any jurisdiction especially if the Insolvency service has already found no case to answer. As they appear to have done in the Op posters case as well.

No one seems to know who should be responsible for policing the system. MP's included. The Reality is no one is policing the system and therefore criminals can do what ever they want.

If the member has acted unethically or is in breach of professional rules then the ACCA/ICAEW can take disciplinary action against that member, and issue a fine or disqualify. HOWEVER if it is more serious than this CIVIL action or CRIMINAL then the correct and only course of action is the courts or Law enforcement via the courts.

Why don't you seek the advice of a reputable insolvency practitioner? There are some out there. (for clarification I am not an IP)

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then ... Black Knight

 

I have read your posts and cannot help thinking that there may be some vested interest in your blindly trying to protect the top 6 firms or the accountancy regulatory bodies. It is absolutely right for people in high positions, such as MP's, etc to rattle cases such as this one, in order that common sense may prevail and the relevant parties (may that be the courts, or the top 6 firms, or regulatory bodies, or any organisations set up to police such cases) wake up to look into such cases, again if necessary, in order to bring fairness to not only this case, but hopefully similar wrong doings in future.

You keep saying that the regulatory bodies cannot do anything - I am nor aware of your standing or profession, but of course the regulatory bodies can do an awful lot, if they chose to, for they have senior persons and teams/departments working there with all the necessary skills they require to conduct their own internal enquiry or investigation, and if they lacked any knowledge or skills, then they can always revert to other relevant regulatory or state bodies, or even consult one of their independent members for input or guidance. I have already said before that if they chose to hide behind feeble excuses, and refrain from regulating their members in top 6 member firms (possibly due to their strong influence with the regulatory bodies)  then  they will certainly lose the respect of vast majority (over 95%) of their members and the public, that is assuming that they they have not already done so. They have turned blind eye to numerous high profile cases, such as when all these big firms have  been dishing out clean audit  certificates for their major plc' clients such as banks over many years,  and were allowed to do so and get away with this, despite large scale evidence that these Accounts were not worthy of clean certificates, as hind sight clearly showed. there are complex audit procedures to set down to cover all difficult audit areas, such as post balance sheet events, contingencies, risk assessments, auditing banks' requirements set by government/Bank of England/other governing bodies, etc, etc and is it nothing but miraculous that none of the top 6 firms audit files and work and complex reviews (incl cold file and hot file reviews ( obviously by their buddies also in such firms) continuously failed to pick up any serious shortfalls, year after year?

Neither Mr Mitchell nor I have the experience or qualifications or information to comment on such cases, but it is only right that any suspicions of any wrong doings are put to rest, after serious input by all government and regulatory departments. There ought to be more people like Mr Mitchell to voice their feelings and opinions and maybe then we may have more policing of the fat cats of the accountancy world.

It is ludicrous to say that just because no criminal actions are not brought to date, the regulatory bodies should continue to sleep. Think of what the world would be if all parents ignored the wrong doings of their children until they were convicted of serious civil or criminal offences. The regulatory bodies could look into any situations internally and by conducting specific monitoring visits to establish any ethical or civil or criminal breaches if they want to win back the respect of everyone, instead of waiting for the courts to eventually wake up. Black Knight may not be aware, but the regulatory bodies have adequate ammunition to discipline any of their members for even very minor deviations from set standards, and they know that as well.

There is an obvious danger involving professional clash of interest and independence when major accountancy firm can act for same client in capacity of auditor, accountant, management or any such consultancy, liquidator/insolvency and various other services, and this even made even more acrimonious by acting for same client's major creditor or eventual takeover party, with material level of overall fees involved. If this does not impair anyone's independence and other ethics, then the members handbooks should be re-written.

 

 

 

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21st Nov 2013 09:46

Dodgy dealings in the insolvency business? Yes.

Interesting some of the defenses of ICAEW and the Big 4. Methinks those maybe employed or otherwise associated with them?

The main defense seems to be "they did nothing illegal". Most likely true but that does not mean ethical.

I had an experience with a client whom I advised should put themselves in administration. However the bank appointed a big accountancy firm to report that which I had already advised.  No choice to the company, no choice as to the fee and that they had to pay for it. Anyway after a 26 page report that same accountant was now transposed into an IP who promptly put the company into administration under instruction of the bank.

It screamed conflict of interest, it screamed unethical behaviour (They charged the company £24,000 for the report and got £15,000 fee for the administration) but no doubt it was all legal.

When I did my post graduate degree I had to attend an Ethical course as a required course. Thought it was a waste then but have since changed my mind. It should be compulsory for any member of a professional body, bankers and politicians. With a repeat every 2 years.

As an accountant myself sad that we often are seen by the public as bad as the bankers and politicians.

There should be a law which prohibits any IP to be a member/employed/associated with an accountancy firm and vice versa. But it will not happen.

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21st Nov 2013 11:21

Certainly not

richardterhorst wrote:

Interesting some of the defenses of ICAEW and the Big 4. Methinks those maybe employed or otherwise associated with them?

The main defense seems to be "they did nothing illegal". Most likely true but that does not mean ethical.

I had an experience with a client whom I advised should put themselves in administration. However the bank appointed a big accountancy firm to report that which I had already advised.  No choice to the company, no choice as to the fee and that they had to pay for it. Anyway after a 26 page report that same accountant was now transposed into an IP who promptly put the company into administration under instruction of the bank.

It screamed conflict of interest, it screamed unethical behaviour (They charged the company £24,000 for the report and got £15,000 fee for the administration) but no doubt it was all legal.

When I did my post graduate degree I had to attend an Ethical course as a required course. Thought it was a waste then but have since changed my mind. It should be compulsory for any member of a professional body, bankers and politicians. With a repeat every 2 years.

As an accountant myself sad that we often are seen by the public as bad as the bankers and politicians.

There should be a law which prohibits any IP to be a member/employed/associated with an accountancy firm and vice versa. But it will not happen.

Certainly not! just applying basic objectivity and an independent mind.

Why would that scream conflict of interest? the lender obviously had provision in their security to appoint an IP for what ever reason and that is what it did.

What has the IP done other than his JOB? The duty is to the lender/ creditors not your client (who also has a duty to the creditors)

Perhaps the client should have taken better advice as to the terms of his lending.

Ethics (independence, objectivity, integrity)  the two main bodies do have very strict guidelines, tests and repeated courses as standard. Of course you have to understand what each of those words mean to apply.

The MP is shouting theft (and perhaps only able to do so in the house) mainly because of his lack of understanding, demanding another pointless enquiry when his departments should have already have done their job and enforced the law.

Law cannot exist without sanctions and unfortunately the government fail to enforce those sanctions so we end up in a state of near lawlessness perhaps for MP's to bleet about.

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21st Nov 2013 11:04

Does anyone have more details on what actually happened ?

"He advised creating a £2m account for a contract the company held with the Driver and Vehicle Licensing Agency that created a hole in the company’s finances, Mitchell told MPs."   -- what does that mean ? 

Lloyds agreed to cover the shortfall by increasing the overdraft limit to £3.75m, but only if the company was put into receivership under what it called “Project Tic” and was then sold into administration again in “Project Toc”.   -- what  ? 

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21st Nov 2013 11:36

Probably not Dave

daveforbes wrote:

"He advised creating a £2m account for a contract the company held with the Driver and Vehicle Licensing Agency that created a hole in the company’s finances, Mitchell told MPs."   -- what does that mean ? 

Lloyds agreed to cover the shortfall by increasing the overdraft limit to £3.75m, but only if the company was put into receivership under what it called “Project Tic” and was then sold into administration again in “Project Toc”.   -- what  ? 

Probably not! It doesn't make much more sense in the extended drivel.

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22nd Nov 2013 18:37

An explanation

1.Irving Warnett (the PwC Director who arrived to be a non executive) advised (and then insisted to the Bank, Lloyds) that almost £2m of DVLA funds (and therefore cash flow) be separated and if not then they should look to their security.

2.The Bank provided the £2m, but then  immediately insisted that the company be sold "vigorously and robustly" by an AMA (accelerated mergers and aquisitions) process. ie put it into admin.

3.Unknown to me, Lloyds Development Capital (LDC) were in discussions to buy the company at that time , this was known as "Project Tick". LDC had for many years wanted to invest, but there had been no need for them.

4.I was given a PwC engagement letter to sign, giving the Bank authority to sell the company (as the client) and  PwC was to act for both the company and the Bank under this letter.

5.I refused to sign that and was advised to simply pay back the £2m, to get the borrowings back to "as was" before PwC arrived.

6.I did that firstly, with Endless LLP, but Lloyds demanded 50% of the company and a formal offer to put it into admin was made and a Newco owned by Lloyds/Endless would be formed to purchase the business from administrators.That was known as "Project Tock"

  I refused that as;

7.Secondly,  within days, I obtained another £2m from a competitor and a deal was agreed with Scottish Motor Auctions, who sent the offer to all parties and pleaded against administration. That should have been the end of the matter, but it was not. However within exactly 24 hours and again behind my back, that had been changed to one of putting the company into administration, Lloyds gaining a shareholding (via a warrant) and unusually, all "business critical" creditors being paid. This had been pre arranged by a pre-packaged administration.

8.With my back to the wall, I had no alternative but to appoint administrators as the Bank were going to withdraw funding.

9.This all happened after a sale of the business had fallen through in April 2008 for a considerable sum. Full due diligence had been carried out and PwC were the accountants acting for the purchasers.

 

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21st Nov 2013 14:55

Michael C Feltham - post above

Don't worry, most of the practitioners I worked with who are qualified were at it as well - I know from the tone of the answers they gave me when I was working out people's tax, or in most cases never coming up with an answer. And they had the cheek to keep on billing these customers thousands. I am not an utter fool. I know that these practitioners were bent.

Their poor customers must have wondered what the hell they were being billed for.

 

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21st Nov 2013 15:26

Nothing

Donald6000 wrote:

Don't worry, most of the practitioners I worked with who are qualified were at it as well - I know from the tone of the answers they gave me when I was working out people's tax, or in most cases never coming up with an answer. And they had the cheek to keep on billing these customers thousands. I am not an utter fool. I know that these practitioners were bent.

Their poor customers must have wondered what the hell they were being billed for.

 

Nothing you could put your finger on though!

OR

Perhaps you should have done something about it then!

Same old politics of envy then?

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22nd Nov 2013 17:19

Same old politics of envy then

Same old personal abuse then. I don't need to be worried about Chartered Accountants. I am sufficiently academically qualified to be on a level with any of them.

I did do something about it; I left their employments and refused to have anything more to do with working with them. I don't like immoral and unethical practices in any profession. So tough.

 

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21st Nov 2013 15:44

the FRC and insolvency? I am confused

The responsibilities of the FRC are as below. I think they may have been trying not to hurt Mr Mitchell's feelings by saying WT_ has it got to do with us!

 

www.frc.org.uk/Our-Work/Conduct/Professional-oversight/Oversight-of-Audi...

 

 

 

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22nd Nov 2013 14:01

This is Britain to -day

This is yet another element of the third biggest heist in the history of crime,

(the first and second biggest heists beinmg the looting of Russia by the Communists from 1917 and the looting of Europe by the Nazis between 1933

and 1945).

Those believing that the law, professions, regulatory authorities, and politicians are on the side of the victims of this crime are deluding themselves. The law is written specifically to ensure such criminality is lawful and to enable the perpetrators to keep the proceeds of their crimes and escape any punishment..

As for the police, they are one of the biggest, if not the biggest, organised crime gang in the country. They are too busy covering up their previous crimes

to investigate this one!

 

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