The English ICA undermined the case for self-regulation when itse for self-regulation. released documents showing it failed to investigate one of the biggest scandals of the 1980s, Labour backbench MP Austin Mitchell said last week.
The government also failed to monitor the investigation, leading to a ‘cover-up’ of the affair, Mitchell said in a letter to industry minister Ian McCartney.
Mitchell said the investigation into the AGIP affair, which centres on accusations made by the Italian oil company that several chartered accountants were involved in a money-laundering scam which cost it #17m, was a whitewash that was based on ‘press clippings and the High Court judgment’, rather than on any primary investigation or evidence generated by the institute.
He added: ‘The report is further evidence of the failures of self-regulation which, in part, have also attributed to the DTI’s cosy, and dare I say “corrupt”, relationship with the institute and the accountancy industry.’
Mitchell was sent the documents related to the AGIP affair by institute chief executive John Collier in April, following a request from McCartney. Mitchell has spent the last three months examining the papers, which include a review of complaints against two members and one non-member in the Isle of Man, Grant Thornton and Coopers & Lybrand in Jersey.
Mitchell questions why the Department of Trade and Industry allowed the institute to take on the investigation rather than independent agencies such as the Serious Fraud Office or the DTI itself.
The institute investigated complaints in 1991, following a civil trial in the Isle of Man brought by AGIP against two partners and one employee of local firm Jackson & Co. They have protested their innocence, maintaining the trial was a miscarriage of justice.
The institute reviewed the case again in 1994, but on both occasions found insufficient evidence to report to the disciplinary committee. Unlike the SFO and the DTI, the institute has no powers to subpoena witnesses to support its investigation. Mitchell said the DTI should fund an open and independent inquiry.
A spokeswoman for the institute denied Mitchell’s claim that it failed to carry out a thorough inquiry. ‘There has been no cover-up. We failed to find any evidence to support a finding of a prima facie case.’
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