Connect to share and comment

Deloitte loses appeal in MG Rover disciplinary case

PlacardEnlarge
(Globalpost/GlobalPost)

LONDON (Reuters) - Accountants Deloitte has lost an appeal over a regulatory ruling that it failed to manage conflicts of interest in its advice to MG Rover Group and the "Phoenix Four" directors who bought the UK carmaker before it collapsed.

MG Rover was put into administration in 2005 with debts of 1.4 billion pounds ($2.1 billion) and the loss of 6,000 jobs. Four of its directors had set up Phoenix to buy the loss-making carmaker for a token 10 pounds five years earlier.

The Financial Reporting Council, which regulates accountants, said last year that Deloitte and an employee, Maghsoud Einollahi, had failed to properly manage conflicts of interest.

Deloitte's appeal against that decision was heard on Monday.

"The Financial Reporting Council Tribunal has confirmed its decision today at the International Dispute Resolution Centre, following the disciplinary hearing against Deloitte & Touche, who were advisers to MG Rover Group, and Mr Maghsoud Einollahi, who was a partner at Deloitte & Touche," the FRC said.

Deloitte said it was surprised and very disappointed with the outcome and disagreed with its main conclusions.

(Reporting by Huw Jones, editing by Sarah Mortimer)

http://www.globalpost.com/dispatch/news/thomson-reuters/130729/deloitte-loses-appeal-mg-rover-disciplinary-case