The UK Financial Reporting Council (FRC) tribunal has fined Deloitte UK with a record fine of £14m for failing to manage conflicts of interest in its advice to British carmaker MG Rover Group regarding its collapse in 2005.
The FRC also fined Deloitte UK’s former partner, Maghsoud Einollahi, with £250,000 and excluded him from the profession for three years.
These sanctions follow the tribunal’s ruling in July, which found Deloitte UK and Einollahi advisory work for MG Rover Group in breach of the Institute of Chartered Accountants in England and Wales’s code of ethics.
FRC executive director conduct Paul George said: "The final report of the tribunal provides a clear analysis of the case and how it reached its conclusions. It should be essential reading for all members of the profession. 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."
Deloitte UK acknowledged it was dissatisfied with the outcome of the tribunal and disagreed with its main conclusions. "We are disappointed that the efforts we and others made did not successfully secure the long term future of the MG Rover Group" a spokesperson said. "Over the coming weeks, we will continue our discussions with relevant stakeholders and professional bodies about the potentially wide ranging impact on the profession and wider business community of the tribunal findings."