AIDB wobbles again on PwC claim
PwC outlines its defence as amendments to complaint from AIDB are turned down by tribunal panel
A tribunal rejected an application today from the Accountancy Investigation
and Discipline Board to amend their complaint against PricewaterhouseCoopers.
As the first public hearing into a UK accountancy firm continued today,
regulators made an extraordinary attempt to amend their complaint against the
firm.
In alleging that the firm fell short of reasonable accounting standards in
the case of collapsed bus manufacturer Mayflower, the AIDB argued that in
addition, the firm should have been more sceptical of the company’s budget
forecasts.
Patrick Lawrence QC, acting for the AIDB, said that PwC knew in 2002 that the
group would potentially breach its banking covenants the following year.
Lawrence said it was just this application that he wished to bring before the
panel.
Michael Pooles QC, for PwC, said: ‘This application is unfair in that it is
too late. To now have this amendment would require extensive and detailed
investigation into Mayflower’s cashflow and how that was managed and what the
directors anticipated.
‘Two of the PwC employees who worked on those documents are no longer with
the company,’ he said.
The panel considered the matter during an adjournment before refusing the
amendment.
The move is the third setback this week for regulators, having had their
complaint against Ian Shelton, Transbus’s financial controller, dropped on
Monday, as well as having to drop its other PwC claim on the advice of expert
witnesses on Tuesday.
PwC are arguing that the non-executive directors of Mayflower dispensed their
duties with diligence.
Pooles said he would show the integrity with which PwC approached the
accounts at the company.
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He poured scorn on the ‘red flags’ which the AIDB had earlier indicated were
signs that Mayflower was headed for trouble.
‘They’re not even yellow flags… this is just the nature of business …of a
company engaged in various substantial investments that isn’t a cause of concern
but a demonstration of the healthy investment of a company which uses the money
it borrows,’ Pooles said.