The report into the Maxwell affair was published on Friday and severely criticised the role of some City institutions, including auditors Coopers & Lybrand Deloitte.
But the ten-year investigation has come under fire from ACCA’s head of business law John Davies, who claims the part played by the DTI needs examining.
‘All sorts of people in the city have been criticised in the report,’ said Davies, ‘but the role of the DTI has to be considered as well.’
‘The control of the DTI [at the time] left a lot to be desired,’ he added recalling a similar scandal in the1970s Robert Maxwell. At the time, the DTI concluded Maxwell was unfit to be in charge of a public company.
‘Why was Robert Maxwell allowed to continue to be a director of the public company when he had already been found to be unfit?’ asked Davies, ‘it does seem rather curious that Maxwell had this record and large institutions within the city were still willing to deal with him.’
He also said the 2001 report raises other issues, such as how long rogue directors are disqualified for and should they be disbarred for life.
But the report did comment on the way in which DTI probes should be used.
‘Recommendations in reports such as this are sometimes implemented, sometimes rejected, sometimes considered for long periods and sometimes ignored,’ it stated.
‘There is a public interest in knowing what the response has been to recommendations made.’
Inspectors Sir Roger Thomas and Raymond Turner suggested the DTI now publishes reports, or include in its annual report, on how it has acted following investigations of this kind.
When responding to the report on Friday, trade and industry secretary Stephen Byers said investigations under section 432 and 442 of the Companies Act – such as the Maxwell inspection – had proved lengthy and costly. He committed to reviewing their operation with the aim of making the probes less expensive and less time consuming while still meeting the essential requirements of fairness.Links
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