PracticeConsultingCoopers’ pensions role under fire

Coopers' pensions role under fire

Coopers & Lybrand Deloitte consistently agreed accounting treatments of transactions that served the interest of Robert Maxwell rather than those of the pension beneficiaries, according to the DTI's report into the Maxwell affair.

The Department of Trade and Industry’s report on the collapse of the corrupt media tycoon’s business empire subjects the auditor’s work for the Mirror Group to particular criticism.

While saying primary responsibility for the abuse of the pension funds should lie with Robert Maxwell, the report says Coopers should bear a major responsibility for failing to report the abuses to the trustees of the schemes.

The abuses included loans of cash from the pension fund to Maxwell’s private companies and investments in Maxwell Communication Corporation.

The report says: ‘We are satisfied that [Coopers & Lybrand Deloitte] accepted a presentation of the accounts which had the effect that the interests of Robert Maxwell were preferred to those of the trustees and beneficiaries, thus failing in their duties as independent auditors.’

According to the report, Coopers decided disclosure of the loans was not necessary on the basis that the loans were reduced to nil at the end of each year of the pension scheme accounts.

But the report calls this reduction ‘window dressing’: ‘CLD consistently agreed accounting treatments of transactions that served the interest of Robert Maxwell and not those of the trustees or the beneficiaries of the pension scheme, provided it could be justified by an interpretation of the letter of the relevant standards or regulations.’

Links

£10m Maxwell report slams auditors

Timeline: The Maxwell scandal

Report recommends ‘comfort letter’

Maxwell report calls for audit rotation

Press baron damned as early as 1973

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