Business

Deloitte fined £14m over MG Rover advice

MG Rover site
Image caption MG Rover went into administration in 2005 costing 6,000 jobs

Accountancy firm Deloitte has been fined a record £14m by an industry tribunal as a result of advice it gave investors involved in collapsed British carmaker MG Rover.

The Financial Reporting Council (FRC) said Deloitte had failed to spot conflicts of interest when it acted as adviser to MG Rover directors.

Four directors bought out the company in 2000 for a token sum of £10.

But the carmaker went under in 2005 with £1.4bn in debts.

In July, the tribunal found that 13 allegations brought against Deloitte by the FRC were proven.

Deloitte showed a "persistent and deliberate disregard" of accountancy ethics, the ruling said.

The £14m fine is below the £15-20m requested by the FRC, but it dwarfs the previous fine handed out to an accountancy firm - £1.4m for PriceWaterhouseCoopers in 2012.

Former Deloitte partner Maghsoud Einollahi was also fined £250,000 and banned from accounting for three years.

Deloitte, which was also severely reprimanded as part of the judgement, continues to disagree with the main conclusions of the tribunal.

A spokeswoman for the firm said: "We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group."

An independent report found that the directors advised by Deloitte, known as the "Phoenix Four", received more than £40m from MG Rover before its collapse, which led to 6,000 job losses.

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