Reuters: Regulatory News: Deloitte disciplinary hearing over MG Rover to resume

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Deloitte disciplinary hearing over MG Rover to resume Jul 15th 2013, 11:40 LONDON, July 15 | Mon Jul 15, 2013 7:40am EDT LONDON, July 15 (Reuters) - Accountants Deloitte will next week return before a tribunal which is assessing whether it failed to manage conflicts of interest in its advice to MG Rover Group and the "Phoenix Four" directors who bought the UK carmaker before it collapsed. MG Rover was put into administration in 2005 with debts of 1.4 billion pounds ($2.1 billion) and the loss of 6,000 jobs. Four of its directors had set up Phoenix to buy the loss-making carmaker for a token 10 pounds five years earlier. There was public anger when it emerged the four had paid themselves 40 million pounds in salaries and pensions before MG Rover collapsed. The four faced no criminal charges but were disqualified from being directors of any company for up to six years. The Financial Reporting Council, which regulates accountants, said last year that Deloitte and an employee, Maghsoud Einollahi, had failed to properly manage conflicts of interest. Deloitte and Einollahi had acted as corporate finance advisors to companies involved with MG Rover and the Phoenix Four while Deloitte was also auditing MG Rover. Deloitte disagreed with the finding and a hearing of the complaint began at an independent tribunal in March. The FRC said on Monday the hearing will resume on July 29. If upheld, Deloitte and Einollahi could face unlimited fines. Deloitte could not comment immediately. The European Union is approving a law to avoid potential conflicts of interest between the auditing and advisory work done by accounting firms. Link this Share this Digg this Email Reprints

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