July 29 (Bloomberg) -- Deloitte LLP disregarded ethical codes while advising on transactions involving the now-defunct U.K. car company MG Rover Group Ltd., an accounting tribunal said today.
Deloitte and one of its former partners didn’t consider conflicts of interest and failed to safeguard against “self-interest” in advising both MG Rover and Phoenix Venture Holdings Ltd., its parent company at the time, the Financial Reporting Council Tribunal ruled, according to a statement on its website.
“Deloitte’s advice, which itself was not criticized, helped to generate over 650 million pounds ($998 million) of value for the MG Rover Group, keeping the company alive for five years longer than might have been the case and securing 5,000 jobs in the West Midlands during this period,” James Igoe, a spokesman for Deloitte, said in a statement on the tribunal’s decision.
MG Rover went bankrupt in 2005 with 1.3 billion pounds of debt and some 6,000 people lost their jobs. Nanjing Automobile Group Corp., a state-owned Chinese company, bought the assets of MG Rover in July of that year for about $97 million.
“The outcome of this tribunal sends a strong clear reminder to all accountants and accountancy firms that they have a responsibility to act in the public interest in the work they undertake,” Paul George, an FRC director, said in the statement.
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