Bloomberg News

Deloitte to Face Tribunal Over Advice Before MG Rover Collapse

February 02, 2012

Feb. 2 (Bloomberg) -- The U.K. accounting regulator issued a complaint against Deloitte LLP for failing to “consider the public interest” while advising on transactions involving the now defunct U.K. car company MG Rover Group Ltd.

The conduct of Deloitte, and a former partner, “fell short of the standards reasonably to be expected,” the Accountancy & Actuarial Discipline Board said in an e-mailed statement. The firm didn’t consider “the conflicts of interest and self- interest” in advising both the car company and its parent company, called Phoenix Venture Holdings. The matter was referred to an independent tribunal.

“We do not agree with the AADB and are confident that when all the evidence is considered, the tribunal will conclude that there is no justification for criticism of either Deloitte or our former partner,” Deloitte said in an e-mailed statement.

MG Rover went bankrupt in 2005 with 1.3 billion pounds ($2.1 billion) of debt and around 6,000 people lost their jobs. Nanjing Automobile Group Corp., a state-owned Chinese Company, bought the assets of MG Rover in July of that year for about $97 million.

The AADB last month secured a record fine of 1.4 million pounds over PricewaterhouseCoopers LLP failures concerning reports on client-money accounts at JPMorgan Chase & Co.’s London securities unit.

--Editors: Anthony Aarons, Peter Chapman

To contact the reporter on this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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