Sanctions for Deloitte on MG Rover case
The Financial Reporting Council (FRC) publishes the final report of the Appeal Tribunal on sanctions in the hearing against Deloitte & Touche, who were advisers to MG Rover Group, and Mr Maghsoud Einollahi who was a partner at Deloitte & Touche.
The Appeal Tribunal hearing on 30 January 2015 upheld several findings of misconduct in relation to Deloitte’s work on ‘Project Platinum’, the project to dispose of the MG Rover loan book and granted the appeal against other findings including those in relation to ‘Project Aircraft’, the project to realise the value of tax losses within MG Rover Group.
The Appeal Tribunal has imposed the following sanctions:
Deloitte & Touche:
- A fine of £3 million
- A severe reprimand
Mr Einollahi:
- A fine of £175,000
- A severe reprimand
The Appeal Tribunal affirmed the need for accountants to act in the public interest and for accountants to take this into consideration in deciding whether to accept or continue an engagement. However, it identified a lack of clarity in how accountants should discharge these responsibilities.
The FRC and the profession are addressing this issue. In February 2012 following an investigation the FRC filed a formal complaint against Deloitte LLP and Mr Maghsoud Einollahi to be heard by an independent tribunal. On 29 July 2013 the Tribunal announced that 13 allegations against Deloitte & Touche and Mr Einollahi had been proven and on 9 September 2013 imposed sanctions as follows:
- Deloitte & Touche: a severe reprimand and a fine of £14 million
- Mr Einollahi: Exclusion from the profession for 3 years and a fine of £250,000.
In November 2013 Deloitte & Touche was granted leave to appeal part of the decision of the Tribunal. On 30 January 2015 the Appeal Tribunal upheld several findings of misconduct in relation to Deloitte’s work on ‘Project Platinum’, the project to dispose of the MG Rover loan book.
The Appeal Tribunal granted the appeal against other findings including Deloitte’s failure to act in the public interest and all those in relation to ‘Project Aircraft’, the project to realise the value of tax losses within MG Rover Group. The Appeal Tribunal also found that the misconduct by Deloitte was not deliberate.
Source: FRC
