Deloitte fined 14 million pounds over MG Rover advice
By Huw Jones
LONDON (Reuters) - Accountancy firm Deloitte has been fined a record 14 million pounds ($22 million) for failing to manage conflicts of interest in its advice to collapsed British carmaker MG Rover Group.
The Financial Reporting Council (FRC), which brought the case against Deloitte, said an independent tribunal also backed the watchdog's call for a severe reprimand of the firm.
Deloitte repeated previous statement that it disagrees with the tribunal's main conclusions.
The FRC has been given stronger sanctioning powers after being criticized for being too lenient in the past on accountants.
"The sanctions imposed are in line with the FRC's aim to ensure penalties are proportionate and have the necessary deterrent effect to prevent misconduct and bolster public and market confidence," FRC's executive director for conduct, Paul George, said in a statement.
The previous record fine was 1.4 million pounds for PricewaterhouseCoopers in 2012 after it wrongly said JPMorgan Chase bank was keeping customer money ring fenced from its own. The fine was below what the FRC wanted.
In July the tribunal found that all 13 allegations the FRC had brought against Deloitte were proven. FRC had asked for a fine of between 15 and 20 million pounds.<IB:nL6N0FZ2NX>
The tribunal also agreed to a fine of 250,000 pounds for Maghsoud Einollahi, a partner with Deloitte at the time. He has also been banned from the profession for three years. Continued...