Watchdog gives Deloitte £14m fine
Accountant Deloitte has been fined £14 million by the industry watchdog over "persistent" failings in its dealings with collapsed car manufacturer MG Rover.
The Financial Reporting Council (FRC) fined and severely reprimanded the "big four" accountant after ruling it did not spot conflicts of interest in its advice to MG Rover and directors who bought the company before its failure.
West Midlands car maker MG Rover collapsed into administration in 2005 with debts of £1.4 billion and more than 6,000 job losses. It had been bought by directors known as the Phoenix Four for a token £10 five years earlier.
Former Deloitte partner Maghsoud Einollahi was also fined £250,000 and banned from the profession for three years after he and the firm showed a "persistent and deliberate disregard" of accountancy ethics.
Deloitte said it was disappointed with the outcome and disagrees with the tribunal's main findings. It has 28 days to decide whether to appeal.
FRC executive director for conduct, Paul George, said the fines aim to deter misconduct and "bolster public and market confidence".
The tribunal in July found against Deloitte on all 13 allegations, including failing to properly consider the public interest. It said two flawed deals in 2001 and 2002 benefited the Phoenix Four rather than MG Rover, and also earned Deloitte hefty fees.
A Deloitte spokeswoman said the firm takes its public interest obligations seriously.
She said: "We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group."
She added the tribunal did not criticise the quality of its work, but still found against it, and warned this could have negative implications for the advice firms and members can provide.