PwC in the clear over Mayflower

Complaints
against PwC over its auditing of collapsed bus manufacturer Mayflower have been
dropped.

Charges against Mayflower subsidiary Transbus’s Finance Director David
Donnelly were also dropped today, as the AIDB faced picking up a £1.4m bill in
costs incurred by the parties.

The central charge, that PwC should have expressed concern over the company’s
ability to continue as a going concern in the 2002 accounts, was dismissed.

Donnelly was also cleared after being accused of failing to inform PwC and
the Mayflower board of dire shortfalls which existed at the Falkirk premises of
the business.

The decisions were announced at a hearing at the International Dispute
Resolution Centre today, though full reasons for the panel’s decisions are yet
to be outlined.

A spokeswoman for PwC said:’We have consistently said that this complaint
should never have been made. We are therefore pleased that the independent
Tribunal has dismissed the complaint against us.’

Ian Shelton, Transbus’s financial controller, was excluded from ACCA for 12
months over his admission that the practice of submitting false spreadsheets had
continued, and that he failed to take steps to stop the practice.

Charges of dishonesty against Shelton were dismissed however.

The panel also took a decision to not impose a fine on Shelton, in view of
his precarious financial position, argued by his legal representative Margaret
Bromley. A longer exclusion would have been imposed, but the panel showed
leniency given how drawn-out the case had been.

Earlier complaints, that PwC knew and failed to stop an unusual invoicing
practice at Mayflower, were dropped last year by the AIDB.

The industry’s first public tribunal began in September last year after the
Accountancy Investigation and Discipline Board laid complaints against PwC and
two senior financial executives of Mayflower, which collapsed in 2004 with debts
of £250m.

Further reading:

Mayflower saga enters final chapter

PwC on the offensive at Mayflower tribunal

Key Mayflower witness ‘in South America’