Deloitte fine over MG Rover case reduced to £3m after appeal tribunal
Deloitte has been fined £3m by a City watchdog over failures in the lead-up to the collapse of MG Rover a decade ago.
The penalty is a significant reduction on an initial fine imposed last year, following an appeal by Deloitte and former partner at the firm Maghsoud Einollahi, the advisers who worked on MG Rover's sale to the so-called "Pheonix Four" before it collapsed into administration.
In January, eight of 13 initial misconduct findings by an independent tribunal for the financial reporting council (FRC) were overturned, giving Deloitte the right to appeal the original fine of £14m.
The regulator has now imposed a £3m fine on the accountancy firm as a result of the appeal, in relation to the five findings which were upheld. Einollahi has received a fine of £175,000, reduced from an initial £250,000, and has also had a three-year ban on working in the City rescinded.
Findings of misconduct were upheld in relation to Deloitte's client engagement process for "Project Platinum", the disposal of MG Rover's loan book. The eight overturned findings were in relation to "Project Aircraft", the operation to realise the value of tax losses within MG Rover.
“Reducing the sanctions imposed by the original tribunal was never a motivation in our appeal," said a spokesperson for Deloitte. "We welcome the decision to overturn the exclusion of our former partner and accept the revised sanctions outlined by the appeal tribunal.”
MG Rover was bought by the "Phoenix Four" directors in 2000 for £10 from BMW. The firm collapsed in 2005, with the loss of thousands of jobs.