Manchester Building Society takes GT to courtby
The Manchester Building Society is taking Grant Thornton to court for £49m.
The society is accusing the eminent accountancy firm of “negligence and breach of statutory duty relating to audit services and advice provided in the years from 2006 up to and including 2013, at which point Grant Thornton resigned as the society’s external auditors”.
“Grant Thornton used to be the auditors of MBS and gave the society advice on how to account for interest rate swaps in their financial reporting,” said a spokesperson for the MBS. "The Society feels that this advice was incorrect, and that it led to them suffering big losses in previous years and they had to raise new capital. MBS is now lodging a claim for that incorrect advice and the losses incurred."
Grant Thornton has refused to comment, stating through their press arm that, “As a large professional services firm, there are inevitably occasions where we become involved in legal claims. Naturally, our obligations of confidentiality mean that we cannot comment on the detail of any litigation in which the firm is involved.”
The society said it had to restate its 2011 results following GT’s advice, which turned a small profit into a loss of £21.9m for the year.
The 2012 results had also shown a loss of £2.3m.
Concurrent to MBS’s legal action, Grant Thornton’s conduct is being investigated by the Financial Reporting Council.