Deloitte has failed to overturn a ruling that it did not manage
conflicts of interest between MG Rover and the so-called "Phoenix
Four" directors in the lead-up to the car maker's collapse.
The International Dispute Resolution Centre upheld a ruling by the
Financial Reporting Council (FRC) highlighting failures from Deloitte
and its employee Maghsoud Einollahi.
Deloitte and Mr Einollahi had acted as corporate finance advisers to
companies involved with MG Rover and the Phoenix Four, while Deloitte
was also auditing MG Rover.
"The outcome of this tribunal sends a strong, clear reminder to all
accountants and accountancy firms that they have a responsibility to
act in the public interest in the work they undertake," Paul George,
FRC's executive director for conduct, said.
"[This result] underlines the FRC's commitment to promote public
confidence and ensure the integrity of the accountancy profession by
upholding the standards expected of members."
MG Rover collapsed in 2005 under the strain of £1.4bn of debt. The
"Phoenix Four" – Peter Beale, Nick Stephenson, John Towers and John
Edwards – had bought the loss-making car maker for just £10 five years
earlier. They were later struck off as company directors for a
combined 19 years after a government investigation into MG Rover's
collapse.
The men collected £42m in pay and pensions from MG Rover during their
five years there, but said they had "done nothing which justifies
disqualification".
Responding to Monday's verdict, Deloitte said it was ready to "move on".
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