Following last week’s news that the Big Five firm could be in breach of institute rules because of its previous work for the company, it has emerged that Andersens launched a joint venture with HSBC two years ago – the creditor responsible for the firm’s appointment to TransTec.
The initiative established the Thames Turnaround Fund, which was designed to be used as an alternative financing vehicle for companies in difficulty.
Institute rules demand that a member should generally decline an insolvency appointment ‘if he or a principal or employee of the practice has such a close and distinct business connection with the floating charge holder (bank) as might impair or appear to impair a member’s objectivity’.
Subsequent paragraphs add that it is unlikely that such a relationship could be established with a clearing bank.
One practitioner with a mid-tier firm said: ‘I think there is more of a conflict given the previous consultancy work but if you work for one of the largest firms in the world then you will run into the big clearing banks on several joint venture.’
But criticism of the firm’s previous relationship with the company and the bank may leave the institute with no choice but to intervene.
HSBC said it had been asked by Transtec to appoint Andersens. The firm was not available to comment.
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