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November 20, 2013

Deloitte UK granted MG Rover fine appeal

Deloitte UK and former Deloitte UK partner Maghsoud Einollahi have been granted leave to appeal part of the independent Disciplinary Tribunal by independent Financial Reporting Council (FRC) tribunal member Richard de Lacy.

In September 2013, the FRC fined Deloitte UK a record £14m for failing to manage conflicts of interest in its advice to carmaker MG Rover Group and also fined Einollahi £250,000 for his role.

De Lacy granted the defendants leave to appeal against the six findings in respect of the Project Aircraft transactions, but refused appeal for the Project Platinum findings.

Project Aircraft related to a £427m loan BMW provided to Techtronic as an inducement to take MG Rover off BMW’s hands.

In giving his reasons for allowing the appeal, de Lacy said "The Tribunal’s reasoning in respect of Project Aircraft is arguably flawed because it attributes the consequences of the transaction (the availability of a significant part of the proceeds to be applied to the personal benefit of the Phoenix Four) to the conduct of the firm and the Member."

He added that "It is clearly arguable that no further client agreement in relation to this transaction was necessary."

The date for the appeal hearing is yet to be announced.

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