Quantuma plans to recover money for creditors after EY and partner Margaret Mills fined and reprimanded over failing to declare a conflict of interest when appointed administrators of Hellas Telecommunications
THE LIQUIDATOR of failed Greek company Hellas Telecommunications is planning to pursue EY for some of the millions of pounds it received in fees for handling the administration, after the Big Four firm was fined and reprimanded over a conflict of interest when it was appointed administrator.
EY and one of its partners, Margaret Mills, were fined and severely reprimanded by the ICAEW over a failure to declare a conflict of interest when appointed administrator of Hellas Telecommunications II and its subsidiary Wind Hellas in 2009.
The ICAEW said it has fined EY £250,000 – one of the largest fines imposed by the institute over failing to declare a conflict of interest – and severely reprimanded the firm and ordered it to pay £95,000 in costs. Mills, global coordinating partner for EY’s restructuring practices, also received a severe reprimand and was fined £15,000.
In a consent order, the institute concluded that Mills, as administrator, had failed to inform its prospective client that neither she, nor any other EY insolvency practitioner, could accept any formal insolvency appointment, owing to a conflict of interest as it had been the company’s auditor in the previous three years.
“The breaches of the code set out in the heads of complaint were inadvertent, however, EY regrets that it fell beneath its usual high standards in this instance and has taken steps to help ensure that inadvertent errors similar to those which resulted in the breaches are not repeated,” EY said in a statement.
Andrew Hosking, a partner at insolvency specialist Quantuma and joint liquidator of Hellas Communications, told the Financial Times that he is planning to try and recover money for creditors from the fees EY received from the administration.
“Creditors have drawn the liquidators’ attention to the ICAEW’s findings and asked us to meet with EY and seek financial redress,” Hosking told the FT.
Hellas Telecommunications II became Europe’s biggest pre-pack administration, whereby the sale of the business is marketed prior to the company entering administration and subsequently sold on appointment of administrators, in 2009 following the collapse of the Greek economy.