Tribunal cuts Deloitte fine over MG Rover affair

ACCOUNTANCY firm Deloitte has had a record fine of £14m levied against it in relation to the advice it gave investors in the MG Rover Group affair reduced on appeal.

An appeal to the Financial Reporting Council upheld various submissions by the firm, resulting in the fine being cut to £3m and accompanied by a severe reprimand.

In February 2012 following an investigation the FRC filed a formal complaint against Deloitte and Maghsoud Einollahi, who was a partner at Deloitte & Touche.

On July 29, 2013 an independent tribunal announced that 13 allegations against Deloitte & Touche and Mr Einollahi had been proven and on September 9, 2013 announced Deloitte & Touche had been fined £14m and issued with a severe reprimand.

Einollahi was excluded from the financial services profession for three years and fined £250,000.

In November 2013 Deloitte & Touche was granted leave to appeal part of the tribunal’s decision.

On January 30, 2015 the appeal tribunal upheld several findings of misconduct in relation to Deloitte’s work on ‘Project Platinum’, the project to dispose of the MG Rover loan book. The appeal tribunal granted the appeal against other findings including Deloitte’s failure to act in the public interest and all those in relation to ‘Project Aircraft’, the project to realise the value of tax losses within MG Rover Group. The appeal tribunal also found that the misconduct by Deloitte was not deliberate.

In addition to the reprimand and cutting Deloitte’s fine to £3m, the tribunal has also cut Einollahi’s fine to £175,000, accompanied by a similar reprimand. He has been allowed back into the profession.

Deloitte said it was satisfied with the outcome but getting the fine reduced had never been the motivation for its appeal.