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Record fine for accountancy giants over MG Rover advice
3:30pm Monday 16th September 2013 in News
ACCOUNTANCY giants Deloitte has been given a record fine for the advice given to investors involved in the collapse of MG Rover.
The Financial Reporting Council (FRC) said the accountants failed to manage conflicts of interest in their advice to Peter Beale, John Edwards, Nick Stephenson and John Towers - the consortium known as the Phoenix Four.
The FRC has given Deloitte a severe reprimand and a fine of £14 million – a record for the council.
It follows the publication of its final report into the matter after a tribunal found that 13 allegations brought against Deloitte by the FRC were proven.
The ruling said Deloitte had shown a persistent and deliberate disregard of accountancy ethics.
The £14 million fine is below the £15-20 million requested by the FRC, but is 10 times the amount of the previous highest fine ever handed out to an accountancy firm by the council.
In a statement, a Deloitte spokesman said the firm had been disappointed with the outcome of the tribunal, and disagreed with its main conclusions.
“As a firm we take our public interest obligations seriously in everything we do,” the spokesman said.
“We are disappointed that the efforts we and others made did not successfully secure the long term future of the MG Rover Group.
“The quality of our work, carried out more than 10 years ago, has not been criticised, but the tribunal found against us on a number of points.
“This could have negative implications for the advice that can be provided, both within the profession and business.”
The Phoenix Four faced criticism over their actions in an independent report, published in 2009, which led to them being disqualified as directors.
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