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Deloitte to appeal against MG Rover fine

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4th Oct 2013
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Deloitte said it will appeal against a £14m fine from the Financial Reporting Council (FRC) for failing to manage conflicts of interest when the big four accounting firm advised collapsed British car manufacturer MG Rover.

The FRC also gave Deloitte a severe reprimand when it published its final report last month into the firm's role as financial adviser last month.

Four directors bought out the company in 2000 for a token sum of £10.

The car maker collapsed in 2005 with £1.4bn in debts and the loss of 6,000 jobs.

A FRC disciplinary tribunal found that 13 allegations brought against Deloitte by the FRC were proven.

In a statement earlier on Thursday Deloitte said, “After careful consideration, we have decided to seek leave to appeal the findings of the MG Rover Tribunal. We recognise the general desire to move on from this case but do not agree with the main conclusions of the tribunal which we feel could create significant uncertainty for individual members and member firms of the ICAEW.”

An FRC spokesman confirmed that Deloitte had sought leave to appeal against the FRC’s disciplinary tribunal.

A tribunal’s decision can be challenged on four grounds: it was perverse or wrong in law; there was injustice because of a serious procedural or other irregularity in the proceedings before the tribunal; significant and relevant new evidence has come to light which was not previously available to the appellant; the sanction imposed was “manifestly unreasonable”

The FRC said it's £14m fine would send a message to all members of the profession about their responsibility to act in the public interest and comply with their code of ethics.

Before the Deloitte fine the FRC has been criticised for being too lenient on accountants, 

When the fine was announced, Paul George, executive director for conduct at the FRC,  said: “The sanctions imposed are in line with the FRC's aim to ensure penalties are proportionate and have the necessary deterrent effect to prevent misconduct and bolster public and market confidence.”

The previous record fine was £1.4m PwC in 2012 after it wrongly said JPMorgan was keeping customer money ring-fenced from its own.

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