Deloitte, one of the U.K.'s largest accountancy firms, has been fined a record-breaking 14 million pounds ($22 million) for its advice to now-collapsed British carmaker MG Rover Group, which the Financial Reporting Council deemed a conflict of interest.
The FRC, which brought the case against Deloitte, said an independent tribunal also backed the watchdog's call for a severe reprimand of the firm, according to Reuters.
Deloitte repeated previous statement that it disagrees with the tribunal's main conclusions.
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"We remain disappointed with the outcome of the tribunal and disagree with its main conclusions," the company said in a statement. "As a firm, we take our public interest obligations seriously in everything we do. We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group."
The FRC has been given stronger sanctioning powers after being criticized for being too lenient in the past on accountants.
"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," FRC's executive director for conduct, Paul George, said in a statement.
The previous record fine was 1.4 million pounds for PricewaterhouseCoopers in 2012 after it wrongly said JPMorgan Chase bank was keeping customer money ringfenced from its own. The fine was below what the FRC wanted.
In July the tribunal found that all 13 allegations the FRC had brought against Deloitte were proven. The FRC had asked for a fine of between 15 and 20 million pounds.
The tribunal also agreed to a fine of 250,000 pounds for Maghsoud Einollahi, a partner with Deloitte at the time. He has also been banned from the profession for three years.
Einollahi, who has retired, declined to comment back in July.
The carmaker was put into administration in 2005 with debts of 1.4 billion pounds and the loss of 6,000 jobs. Four of its directors, the "Phoenix Four" had set up Phoenix to buy the loss-making carmaker for a token 10 pounds five years earlier.
Deloitte and Einollahi had acted as corporate finance advisers to firms involved with MG Rover and the Phoenix Four, including giving tax advice while Deloitte audited MG Rover.
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The accountancy firm, one of the world's "Big Four," reiterated comments it made in July that the ruling could restrict the advice accountants can give firms.
"Over the coming weeks, we will continue our discussions with relevant stakeholders and professional bodies about the potentially wide ranging impact on the profession and wider business community of the tribunal findings," Deloitte said.
The fine will go to the U.K. Consultative Committee of Accounting Bodies, an umbrella group for several professional bodies, which pays the costs of FRC disciplinary cases.
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