FRC publishes Final Report of Disciplinary Hearing: MG Rover Group, Deloitte & Touche and Mr Maghsoud Einollahi
09 September 2013
The Financial Reporting Council (FRC) today publishes the final report of the disciplinary hearing against Deloitte & Touche, who were advisers to MG Rover Group, and Mr Maghsoud Einollahi, who was a partner at Deloitte & Touche.
Following the independent Tribunal hearing on 29 July, where it was announced that all 13 allegations had been proven, the final report and detailed findings set out the Tribunal’s conclusions and send a strong and clear message to all members of the accountancy profession about their responsibility to act in the public interest and comply with their code of ethics.
Having heard submissions from the parties, the Tribunal imposed the following sanctions:
Deloitte & Touche:
- A severe reprimand
- A fine of £14 million
- Exclusion from the profession for 3 years
- A fine of £250,000
Paul George, Executive Director Conduct said:
Notes to editors:
“The final report of the Tribunal provides a clear analysis of the case and how it reached its conclusions. It should be essential reading for all members of the profession. The sanctions imposed are in line with the FRC’s aim to ensure penalties are proportionate and have the necessary deterrent effect to prevent misconduct and bolster public and market confidence.”
- The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work. We represent UK interests in international standard-setting. We monitor and take action to promote the quality of corporate reporting and auditing. We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
- In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:
- Decision to investigate
- Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal
- Tribunal hearing
- Determination and imposition of sanction and/or costs orders
- The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.
- Investigations are conducted by Executive Counsel and the Professional Discipline team within the Conduct Division. If disciplinary proceedings are commenced, Executive Counsel delivers a complaint to the Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary Tribunal.
- Disciplinary complaints filed following an investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body covered by one of the Schemes and withdrawal of practising certificates or licences.