News just out that Vince Cable has referred three Insolvency Practitioner partners from Deloitte to the Institute of Chartered Accountants for investigation over the Comet administration. It appears there are two alleged issues:
- Failure to consult properly with workers and unions over potential redundancies which has left the tax payer picking up an £18.4 million bill
- A conflict of interest because the firm had worked for Comet before its collapse in 2012
The first issue will depend on the facts and we certainly don’t know enough to pass comment on that. Whilst we don’t know the full story re the potential conflict, BM&T has always thought that Insolvency Practitioners should not be allowed anything but the most minimal role advising a company in distress.
We firmly believe that advice to a company in distress should be independent and objective and the adviser should have no interest in the company entering any formal insolvency process. Anything else will always be a potential conflict of interest.
Deloitte has denied any conflict of interest and we will await the outcome of the investigation with interest.
David Bryan – Principal, BM&T
28th July 2014