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Former Deloitte partner cleared of misconduct

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30th Jan 2015
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An appeal tribunal has cleared former Deloitte partner Maghsoud Einollahi of deliberate professional misconduct regarding his involvement in the collapse of MG Rover.

The tribunal, chaired by Sir Stanley Burnton, allowed the appeal by Deloitte and Einollahi of eight charges relating to deliberate misconduct, but upheld five counts against the Big Four firm of failing to account for conflicts of interest.

Paul George, FRC executive director of conduct, said: “The FRC welcomes the Appeal Tribunal’s decision that there were some significant issues of misconduct in this case concerning the need for accountants to act with objectivity.

“Firms should identify who the client is at as early a stage as possible so that any conflicts of interests can be addressed. In the event of a change in clients it is also essential to inform a previous client of the change and of the need to obtain independent advice.

“Threats of self-interest in relation to fees must also be safeguarded. These are important measures in safeguarding and maintaining confidence in the accountancy profession and in upholding the standards expected of members.”

Deloitte was fined £14m and given a severe reprimand when the regulator published its final report in September. The FRC concluded Deloitte had failed to act in the public interest in its role as financial advisers to the collapsed company.

The tribunal investigated the role of Einollahi and the Phoenix Four - Peter Beale, Nick Stephenson, John Edwards and John Towers - who bought MG Rover in 2000 before its collapse. MG Rover later collapsed in 2005 with debts of £1.3bn and the loss of 6,000 jobs.

A Deloitte spokesperson said: “We are pleased that the findings of failing adequately to consider the public interest and deliberate serious misconduct have been overturned.

“We take such responsibilities extremely seriously and these findings were entirely unreflective of the integrity and values of our firm. However, we accept the tribunal’s findings that aspects of our client engagement processes could have been better.”

ICAEW chief executive Michael Izza also commented on the tribunal outcome: “Today’s ruling suggests there needs to be greater clarity for the accountancy profession with regard to its public interest responsibilities. We need to work through the detail of the tribunal’s ruling before coming to any firm conclusions.”

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the sea otter
By memyself-eye
01st Feb 2015 16:08

The only misconduct

Was in the way the previous labour government prevented John Moulton from acquiring MGR and turning it into a true sports car manufacturer, ditching the saloon range and going back to it's roots.

If that had happened we would still have a proper MG, built in Brum.

But Moulton was seen as one of those crooked venture capitalists whereas the phoenix four were decent hard working lads, weren't they........  

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By Ted Numbers
02nd Feb 2015 14:12

Am I alone

in thinking that its all a bit late to be coming out with stuff related to the MG Rover affair? What good does it do now and at what cost to the public purse? Yes people who stand accused need a hearing, but in a reasonable timescale, surely?

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By User deleted
03rd Feb 2015 08:24

Tardiness setting the tone ...

for Chilcott, which is long overdue with still no end in sight

On the subject of Chilcott - are we going to be allowed access to the bits redacted because those in the frame don't want parts published

Or are we to remain permanently in the dark - if so, sounds as though a bit of hacking is required to obtain the missing information & publish it !!!!

Has all the hallmarks of David Kelly cover-up

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By AndrewV12
09th Feb 2015 12:06

It pays to be big

Big is beautiful

Mmmm a former partner in one of the  big four flexes a bit of muscle, opens up the cheque book, gets on the phone to his layers and the rest writes its self.

 

Compare this to that poor Accountant who was stuck off from his Accounting governing body last month.    

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