Mazars London managing partner faces pensions tribunal
FRC's executive counsel calls on Mazars and London managing partner to face tribunal over advice to First Quench pension trustees
A TRIBUNAL WILL BE SET into the conduct of Mazars and its London managing partner Richard Karmel over pensions advice.
The executive counsel of accountancy watchdog the Financial Reporting Council has issued a formal disciplinary complaint against Mazars and Karmel in relation to advice provided to the trustee of First Quench Pension Fund.
The advice focused on the proposed replacement of First Quench Retailing as the sponsoring employer of the fund.
Alleged misconduct occurred between 5 August 2007 and 18 September 2007, in relation to the provision of a report to the trustee on the quality of the covenant of First Quench Retailing at 30 May 2007; a report to the trustee on the quality of the covenant of the new company assuming the transaction (i.e. the substitution) were to proceed; and a report to the trustee on the merits and risks of the transaction. This was presented as a report “on the benefits and risks of retaining First Quench Retailing Limited as the sponsoring employer and the benefits and risks of transferring to Newco”.
The complaint alleges that the conduct of both Mazars and Karmel fell “significantly short of the standards” expected of ICAEW firms and its members. It alleges they failed to act within the ICAEW’s ethical code in professional competence and due care, to act with objectivity, to respect the confidentiality of information, and to act with integrity.
Mazars has strongly refuted the allegations against itself and Karmel. A statement from the firm said: “We are disappointed that the FRC has decided to pursue a formal complaint in relation to this piece of advisory work. The firm takes its commitment to quality, objectivity and integrity very seriously and intends to contest these allegations robustly.”
Karmel qualified as an accountant in 1991, and has worked with companies and banks in helping them manage their reputational risk. He has also undertaken high-level work in creating assurance standards around companies’ obligations to human rights.
He is the managing partner of Mazars’ London office, with the exception of banking and insurance services.
First Quench Retailing entered administration in October 2009 putting its subsidiaries Threshers, Wine Rack and Victoria Wine in jeopardy.
Initially the company employed 6,500 staff and 1,300 stores. However, the company was sold to various local businesses saving about 500 stores and about 1,000 jobs.