ICA grilled by DTI
Heritage collapse set for Commons hearing as insolvency service enters fray.
The government has questioned the English ICA about its decision not to proceed with disciplinary action against Grant Thornton over its role in the collapse of housewares distributor Heritage plc.
Officials from the Trade and Industry department’s insolvency service recently discussed the case with the institute following complaints from former Heritage chairman Jeffrey Lampert.
Lampert alleges that professional misconduct by Grant Thornton and Lloyds Bank contributed to the 1996 collapse of Heritage and argues that the institute’s decision in February not to proceed with disciplinary action against the firm was wrong.
Grant Thornton investigated Heritage on behalf of Lloyds, and was subsequently appointed as its receiver. The mid-tier firm also provided tax advice to Heritage.
A DTI spokeswoman this week confirmed a meeting with the institute had taken place, but emphasised this did not imply any wrongdoing. A parliamentary debate highlighting the case is scheduled for tomorrow.
The adjournment debate was requested by Lampert’s MP Rudi Vis and is expected to question whether accountants appointed to investigate a company should be allowed to act at its receiver. The case has revived allegations that investigating accountants, tempted by the prospect of large fees, are forcing troubled companies into receivership – an accusation hotly denied by insolvency practitioners.
Another MP, Jim Cousins, recently quizzed insolvency minister Kim Howells on the issue and the Heritage case.
Howells replied that his department was ‘in touch’ with the institute and added that the DTI had received 68 complaints about insolvency practitioners since May 1997.