Deloitte Fined £14m Over MG Rover Collapse
Accountancy giant Deloitte has been fined £14m over "persistent" failings in its dealings with collapsed car manufacturer MG Rover.
The Financial Reporting Council (FRC) ruled both Deloitte and former Deloitte partner Maghsoud Einollahi had displayed a "persistent and deliberate disregard" of accountancy ethics by failing to spot conflicts of interest during consultations in 2005.
Einollahi, now retired, was fined £250,000 and banned from practising as an accountant for three years.
Deloitte had been advising a group of former MG Rover directors known as the Phoenix Four during a failed attempt to revive the company, having purchased it for a nominal fee of £10 five years previously.
Both Deloitte and Einollahi had "placed their own interest ahead of that of the public" and "compromised their own sense of objectivity" during consultations, the FRC said.
The West Midlands car maker collapsed into administration in 2005 with debts of £1.4bn and more than 6,000 job losses.
The tribunal in July found against Deloitte on all 13 allegations, including failing to properly consider the public interest.
It said two flawed deals in 2001 and 2002 benefited the Phoenix Four rather than MG Rover, and also earned Deloitte hefty fees.
Deloitte said it was disappointed with the outcome and disagreed with the tribunal's main findings.
It has 28 days to decide whether to appeal.
FRC executive director for conduct, Paul George, said the fines aimed to deter misconduct and "bolster public and market confidence".
A Deloitte spokeswoman said the firm took its public interest obligations seriously.
She said: "We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group."
She added the tribunal did not criticise the quality of its work, but still found against it, and warned this could have negative implications for the advice firms and members can provide.