Deloitte to face tribunal over advice before MG Rover collapse
LONDON – The UK accounting regulator has issued a complaint against Deloitte LLP for failing to "consider the public interest" while advising on transactions involving the now defunct UK car company MG Rover Group.
The conduct of Deloitte, and a former partner, "fell short of the standards reasonably to be expected," the Accountancy & Actuarial Discipline Board said in an e-mailed statement.
The firm didn't consider "the conflicts of interest and self-interest" in advising both the car company and its parent company, called Phoenix Venture Holdings. The matter was referred to an independent tribunal.
"We do not agree with the AADB and are confident that when all the evidence is considered, the tribunal will conclude that there is no justification for criticism of either Deloitte or our former partner," Deloitte said in an e-mailed statement.
MG Rover went bankrupt in 2005 with 1.3 billion pounds ($2.1 billion, 1.6 billion euros) of debt and around 6,000 people lost their jobs. Nanjing Automobile Group (NAC), a state-owned Chinese company, bought the assets of MG Rover in July of that year for about $97 million.
Another state-owned Chinese automaker, SAIC, lost out on the asset bidding after buying the intellectual property rights to sell the Rover 25 and 75 models in China. SAIC merged with NAC in 2007 and has since restarted small-scale production of MG models at MG Rover's Birmingham factory.
Sources: Bloomberg / Automotive News EuropeContact Automotive News