The Financial Reporting Council (FRC) has fined Deloitte £14 million due to the advice it gave investors involved with MG Rover. Until this landmark ruling, the largest fine handed out to an accountancy firm was £1.4 million, to PwC in 2012.
MG Rover collapsed in 2005, £1.4 billion in debt, costing 6,000 jobs. An independent report found that the directors advised by Deloitte, known as the ‘Phoenix Four’, received more than £40 million from MG Rover before its collapse.
According to the FRC, Deloitte didn’t identify conflicts of interests while acting as adviser to MG Rover directors, who bought the company out in 2000.
13 allegations were brought against the accountancy firm. It was ruled that Deloitte showed ‘persistent and deliberate disregard’ of accountancy ethics.
A spokeswoman for Deloitte, which disagrees with the conclusions of the tribunal, said: ‘We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group.’